Dax Cooke set up online platform Farm Folio last year, allowing individuals to invest $25,000 or more in Latin American agriculture. One project is underway and five more are in the pipeline for this year. We ask Cooke how his investment platform works, why his firm is targeting Latin America and why they abandoned their headquarters in Panama for Colombia.
How does your investment model work and how do you expect it to scale up?
This is not a scale-year, [but] we want to be ready for scale. What we are doing is like RealtyShares or Fundrise [which are real-estate investment platforms]. We set up a structure where accredited but normal people can invest through a Delaware limited liability company into an agricultural project in South America. We are starting with growth projects and family-owned farms.
“Agriculture is what commercial real estate was in the 1970s”
In our Colombian project with teak, organic passion fruit and cattle, we are 50/50 partners with the family who manage the farm, [and we have brought in experts for expansion]. We have upcoming projects in Mexico and possibly Peru.
We are acting as project managers and have operational control. Once investors get paid back, we will go into a split ratio.
We have a pipeline of five projects [this] year, and once we [have] about ten projects, we will invest throughout the supply chain.
Agriculture is what commercial real estate was in the 1970s. The next ten to fifteen years is going to be very exciting.
Why are you based in Colombia?
We were recruited by ProColombia, the governmental development authority. We moved from Panama to a government-sponsored incubator. Medellín has a very techcentric environment.
Where are the opportunities in Latin America?
The major opportunities for us are Colombia, Brazil, Panama and Peru. Certain regions are attractive due to the input costs, the ability to export in dollars and land pricing. We are securing contracts for the next five to seven years. Several of our members are market buyers for Costco and Wholefoods, which helps justify our projections.
Given the recent attention around Panama’s banking industry, are you pleased you moved?
I am. I don’t know what the result of this [banking scandal will] be but it is creating a lot of scrutiny. You see the size of the buildings going up everywhere in a country with five and a half million people, and you wonder.
A bubble would affect agricultural land prices in Panama. A lot of people in the 1980s and 1990s were going out with helicopters, fencing off land in the middle of nowhere, putting cattle on it, waiting five years and titling [it]. With value increases those people have made plans to sell.
Agricultural land prices are also affected by development outside of Panama City. In Penonomé there has been a lot of energy investment, causing prices to double over the last five or six years.
But you are still targeting Panama as an investment destination. Why?
I hope we will go back there in a few years if there is a [pricing] correction, because it is a great geographical location from an export and organic opportunity standpoint. It’s just too expensive right now.
What are the best ways to achieve scale in Latin America? Email me: email@example.com