In less than six years of operation, Riza reached the $ 16 billion mark under management. In the third episode of the root of the business – partnership between Infomoney and The Agribiliz, its road between the countryside and Faria Lima – the partner and manager of the manager’s Agribusiness Center, Paulo Mesquita, spoke about Riza’s trajectory, agribusiness funds and the role of the capital market in sector financing.
To illustrate the scenario of Brazilian agribusiness, Mesquita exemplifies: “I have producers who last week bought a farm of $ 1 billion. Most of the Brazilian agribusiness is quite quiet.”
The Terx Fund ()
The executive highlighted the importance of the Terrax Fund, aimed at the acquisition of agricultural properties. According to him, it is an asset that combines income and appreciation. And the strategy, according to the manager, has three sides.
Continues after advertising
First, basically, they buy the producer’s land with a discount – between 40% and 50% of market value – and lease back. “I give him a choice for him to repurchase this land for the same amount I acquired at the beginning and, for that, he pays an annual prize,” he explained in the interview. “We use Earth’s equity to provide long -term capital.”
And there is also the option to buy together with a land. If, for example, the producer wants to acquire a property for $ 100 million, Riza is associated with him, which will acquire 10% of the farm for $ 50 million, while the house pays the same amount for the rest of the property and leases the land, with full purchase option and annual prize payments.
The third focus is through land equitylooking for cheaper lands to turn it into salable assets into market values, for profit. This occupies about 20% of the brand’s strategy so far, but is viewed as the most profitable in the long run. “The real estate market demands this monthly income. The investor tells that. If I would simply buy land to transform and sell in the future, I couldn’t have this flow of dividends to my quotaholder.”
Continues after advertising
Valorization of Lands and Fiagros
The executive also commented on the high potential of appreciation that exists for land in Brazil. “There is a very large value of land appreciation in Brazil. Here you make two harvests. And we still have a lot to develop in terms of infrastructure, to drain this production,” he said.
The manager was also consolidated in the area of strokes, instruments that connect the investor to the field. Mesquita stressed that these funds represent an interesting alternative, but require careful analysis at the time of investor to look at this type of product. “What you should observe is the history of the manager. History is very important,” he said.
