Bert Glover on investing over $600M into regenerative farms in the US and Australia and selling soil carbon credits to Microsoft

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Bert Glover of Impact Ag Partners, comes back on the podcast for a discussion about soil carbon credits, operating his fund in Australia and North America, as well as the importance of biodiversity and more.

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Finally after 3 years a check-in conversation with Bert Glover of Impact Ag Partners in Australia, who over the last years put over $600M to work on farms using regenerative practices. They managed to sell some of the world’s first soil carbon credits to Microsoft and are launching an Australia focussed fund. So why with all these achievements did he decide to also start operations in North America? What does he see happening in the soil carbon markets and where will the market of biodiversity credits go to?

IMPACT OF CARBON CREDITS ON YOUR INVESTMENT RETURNS

The carbon market has pretty much underpinned that whole business model. There are funds and investors that are buying assets in Australia, purely to put into an HIR project, and the returns are purely from the carbon.

“Back when we did the soil carbon deal, we’re seeing annual cash yield, you know, upticks of, say 40 basis points and off some farms up to 100 basis points on an annual cash yield basis, and that’s at a price that’s in the teens. We’re now talking about prices that are in the mid to high 20s. So maybe you start getting 50, 60 basis points on an annual basis, just from one soil carbon project. So it’s starting to be more significant, depending on where you are, and if the price continues to rise…’ – Bert Glover

WHY BERT DECIDED TO START INVESTING IN AND FARMING IN NORTH AMERICA

The decision is triggered by the fundamental core values of the business and what they believe in, and what they want to achieve. They hope to take a lot of their learnings, they’re already working with universities. It’s a substantial move. They look to create a ripple effect through societies and industries and have an impact on some governments about approaching food and fibre production differently.

‘It could be a great launching path for us but also a great demonstrator of how we can go about things to address climate change and food production. I felt like we had to get a footprint in the US.’ – Bert Glover

‘We can help be a thought leader around how agriculture can play a major role in decarbonizing the atmosphere, producing nutrient-dense food, and demonstrating how livestock have a critical role to play in landscapes, and the role that external capital can play in catalyzing that change.’ – Bert Glover

‘I felt like by going to North America, and potentially going a bit broader globally, just maybe we can take some of our learnings and share those, maybe we can share some of our successes, and also share some of the things that haven’t worked so well.’ – Bert Glover

THE KEY ROLE OF LIVESTOCK TO BUILD SOIL

The planet has covered something around 50% or 60% of grasslands. There are so many plants out there, that we could stimulate with livestock to sequester more carbon.

‘That’s why we’re so passionate about the role that livestock play in ecosystems. We think that they’re the key to taking a low-value product as in Savanna grass and high content lignin product and converting into nutrient-dense protein being beef, whilst at the same time asking these plants to function and work and draw down carbon and sink that excess carbon extra data into the soil.’ – Bert Glover

BIODIVERSITY PLAYS A KEY ROLE

Biodiversity is so important in our systems and in our landscapes, and we have lost a lot of it. The role it plays in the business of producing food is key. It is necessary to measure it, manage it, and enhance it. Bert and his team, together with third parties and ecologists are working on measuring it. Everyone’s got a role to play in improving biodiversity.

‘In our business, in our extensive agricultural production systems, in our suite of assets, plants are just the key for us, without a diverse set of plants in our systems, we don’t have soil health. Without these biodiverse healthy plants, we don’t have healthy animals. I mean, we can’t produce healthy crops without our plants and soils being 100% healthy. So we need all this stuff. We need biodiversity in our systems.’ – Bert Glover

STARTING A NATURAL CAPITAL FUND IN AUSTRALIA

This fund will focus on real assets in agriculture. Offering this new product to the market, which is a natural capital, and real asset fund, will open it up to more investors that want to have some exposure to the asset class, but probably haven’t had the capacity to go on their own and a separate management account.

‘We wanted to open up a product to a larger segment of the market so that more investors could invest with us. Just from an efficiency and a return profile point of view in Australian dollars, we couldn’t really take in capital under $10 million in a separate managed account’ – Bert Glover

‘We’ve got some future ambitions to bring in other things, such as venture capital around ag-tech, and climate tech, and also emissions reduction, and even some financing options. I think we spoke about green finance and environmental finance.’ – Bert Glover

OTHER POINTS DISCUSSED

Koen and Bert also talked about:

  • Investors got interested in regenerative agriculture;
  • Methane in feedlot environment and natural grazing system

To know more about Bert Glover and Impact AG Partners, download and listen to this episode. 

LINKS:

LINKED INTERVIEWS:

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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