In just over six months since the first launches, Fiagros (Investment Funds in Agroindustrial Chains) have already attracted around 51,600 investors, most of them individuals, and R$3 billion in resources.
The appeal of investing in the agricultural sector in a scenario of global inflationary pressure and high commodity prices has contributed to attracting new interested parties.
In addition, the rise in the basic interest rate, the Selic, also favors interest in funds, given that one of the main targets on managers’ radar are CRAs (Agribusiness Receivables Certificates). These assets are usually indexed to the CDI. Therefore, as the Selic goes up, the yield offered by the certificates also increases.
The funds invest in a variety of crops in the agro sector, with a more focused look at the moment on soy, corn, sugar and ethanol, and propose returns that start at around 3% per year, plus the CDI.
These funds are intended to allow rural producers to raise funds, without the need to resort to public financing or large private banks.
Today there are 23 Fiagros listed on the Brazilian Stock Exchange. They began to hit the market in mid-October last year, and quickly attracted the interest of thousands of investors.
Almost all of the quota holders’ base is made up of individuals (99.25% of the total), attracted by the fact that the product is exempt from IR (Income Tax) on income earned, in addition to exposure to agribusiness and CDI .
From January to April, there was an increase of approximately 70% in the number of investors with Fiagros shares in their portfolio.
Discover the types of Fiagros
The legislation allows for three different types of Fiagros, the main one being Fiagros Fundos Imobiliários, which follow the rules established for FIIs listed on the Stock Exchange.
Of the total of Fiagros, 21 are of the real estate fund type, which can be accessed by any investor.
Most of them operate in a format similar to the so-called paper real estate funds, which invest in CRIs (Real Estate Receivables Certificates). The difference is that the Fiagros are focused on agriculture, through CRAs, or even CRIs that are related to the sector. agricultural
There are also two Fiagros that follow the structure of FIDCs (Investment Funds in Credit Rights), and the legislation also allows Fiagros of the FIP type (Funds for Investment in Participation), which have the prerogative to invest in real assets, such as farms and forests.
FIDCs and FIPs, however, are aimed only at investors classified as qualified by the legislation, with more than R$ 1 million in financial investments.
See how some managers set up their Fiagros
ITAÚ: With BRL 600 million, RURA11 is the largest Fiagro on the market
Launched in early March by Itaú Asset, RURA11 is currently the largest Fiagro in the market in terms of equity, with approximately R$600 million and 5,600 shareholders. The fund’s shares were traded at R$10.35 on Friday (13) on B3.
According to Tadeu Barreto, agribusiness manager at Itaú Asset, the expectation is to allocate all the capital raised — about half of which has already been invested — by the end of June, especially in agribusiness sectors such as sugar, ethanol, as well as grains such as soybeans and corn. .
The target return is 3% to 3.5% per year, plus the CDI variation. Therefore, with the Selic rate at 12.75%, and heading towards even higher levels, the nominal return proposed to investors is now above 15%, says Barreto.
If the moment is quite favorable from the investor’s point of view, on the side of companies, a greater dose of caution is necessary.
With the increase in the Selic rate, the bar in the choice of assets also needs to rise, in order to avoid papers in which issuers may have difficulties to honor their commitments, says the manager. “I have to look a lot harder to get where I want to be than I did a year ago.”
To select the projects, the manager counts on the assistance of Itaú BBA Trading, an arm of the investment bank focused on the agro sector.
RURA11 has a management fee of 1% per year, with a performance fee of 20% on income that exceeds CDI plus 1%.
BTG Pactual: Fiagro FIDC seeks more management flexibility
At BTG Pactual, the decision was made in March of this year to structure a Fiagro within the framework of a FIDC.
According to Leonardo Zambolin, partner and manager of the bank’s agro portfolio, the option for the FIDC was to allow greater flexibility in the selection of assets.
BTG’s Fiagro can invest in financial instruments that are not eligible for Fiagro’s real estate portfolio, such as CPRs (Rural Product Certificates) and CDCAs (Agribusiness Credit Rights Certificates), in addition to FIDC shares.
“The idea is to operate the fund as the treasury operates with the bank’s proprietary capital, with flexibility to close transactions according to the issuers’ profile and needs”, he says.
The fund has assets of approximately R$304 million and has around 4,700 investors.
Among the investments in the portfolio, there are shares in the FIDCs of Zilor and Usina Coruripe, with rates of return of around 5% per year, in addition to the CDI.
Zilor is a Brazilian multinational that produces renewable electricity and natural ingredients for human food and animal nutrition from sugarcane processing, while Usina Coruripe is focused on the sugar-energy sector.
“We like the sugar-energy segment for the growth of ethanol as a renewable energy source, even for the ESG bias [investimentos responsáveis sob a ótica ambiental, social e de governança] inside the bank”, says Zambolin.
The fund has a management fee of 1.15% per annum, and a 10% performance fee on earnings that exceed the CDI. The BTAG11 share was traded at R$97.99 on Friday.
SUNO ASSET: manager closes partnership with Boa Safra Sementes to launch hybrid Fiagro
Suno Asset, in turn, closed a partnership with the agricultural company Boa Safra Sementes in early May for the structuring of a real estate Fiagro worth R$ 125 million, which should reach the general public by mid-August.
The minimum investment will be R$ 100.00, with an administration fee of 0.92% per year, without performance.
The product will be in a hybrid format, with a portfolio composed mostly of CRAs, but also with a smaller portion of 20% destined to properties related to business in the field.
Investment director at Suno Asset, Vitor Duarte says that two logistics warehouses are already in the final stages of construction in the cities of Sorriso and Primavera do Leste, in Mato Grosso, known for the production of grains such as soybeans and corn. The properties will be acquired by the fund and subsequently leased to Boa Safra.
The agricultural company specialized in seed production and which went public on the Stock Exchange in April 2021 will provide advice to the manager in the selection of CRAs.
The expectation is to deliver to shareholders a return of around 3% per year, plus the variation of the CDI.
At first, a single Fiagro quota was issued, fully acquired by Boa Safra. As it was carried out in the form of an offer restricted by market legislation, it is necessary to wait a period of 90 days for Boa Safra to be able to trade the fund’s shares on the Exchange.
XP: broker indicates greater caution with animal protein and focuses on diversification
XP, on the other hand, launched in November 2021 the XP Crédito Agrícola Fiagro Imobiliário, with around BRL 135 million, all of it already committed, and 6,500 investors.
According to Gustavo de Almeida, executive responsible for the commercial area of Fiagros at XP, one of the main characteristics of the house fund is the diversification of the portfolio.
Fiagro has exposure to different issuers in ten states, with an allocation more targeted to soybean and corn plantations and to the sugar and ethanol sector.
“Diversification helps to dilute interest payments during the year, since the harvests are at different times”, says Almeida, who seeks operations indexed to the CDI plus interest between 4.5% and 5.5% per year.
The XP specialist adds that at the moment he is more cautious in relation to the animal protein sector, especially poultry and pork, in the face of rising costs and the constant embargoes imposed by China, with margin compression.
The fund’s management fee is 1% per annum, with 10% performance on what exceeds 100% CDI. On Friday, the XPCA11 was also quoted at R$10.35.
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