Infrastructure investments can often be more meaningful to investors as they are tangible assets which offer clear benefits for years to come. Whether they are solar installations creating energy, a GP surgery paid for by the government or a hydroponic glasshouse growing and selling tomatoes, the risks should be more understandable and therefore easier to assess.
Amberside ALP explain why they liked the first project they invested in – the Sterling Suffolk greenhouse. This is not the sort of greenhouse you’ll find in the back garden, at 5.6 hectares it is the size of 11 football pitches. It is probably not the first thing people think about when they think of infrastructure investments, typically these would be a road, an airport, power plants or a gas pipeline. However, it fits nicely into a growing trend to reduce food miles, and infrastructure such as this is essential if Britain is to become more self-sufficient in food production.
More importantly it was the risk return dynamics that really appealed to the team at Amberside ALP. They highlighted two major risks for the project: could it be built and what would happen to the price of tomatoes over the longer term. Phase one has been built on time and on budget thanks to a very experienced Dutch construction team and experienced Project Manager. To get comfortable on the long-term price of tomatoes they studied the historic pricing data. While varieties come and go they took comfort from the fact the British consumer enjoys a tomato and has done for some time. In addition, because there are equity investors in the project, taking a higher risk, the price of tomatoes can fall by circa 20% before the project becomes short of cash to meet its loan obligations to Amberside ALP.
It’s been a case of so far so good for Sterling Suffolk. This glasshouse is one of the most energy efficient in the country, and after the construction of phase 1 was completed in December 2018 produced its first tomato harvest on the 27th February which featured on BBC’s The One Show on the 6th March. The tomatoes are now available in a premium UK supermarket chain as part of a 5-year contract which is in place with a major fresh produce distributor. You can read more about this exciting project in The Times and the Daily Mail.
Investors still have the opportunity to invest in this project via the Amberside ALP – Sterling Suffolk Only Bond, which offers an interest rate of up to 8.5%. Debt is secured with a first charge against the assets of the borrower, and because Phase 1 of the site has been built, the construction risk has been reduced significantly. Investors have a choice to either take interest payments every six months, or roll it up and have it paid out at maturity alongside the original capital.
At time of writing, Amberside ALP is offering a full range of bonds as follows:
Diversified Bonds
Single Company Bonds
To find out more, please listen to David Scrivens, Director of Amberside ALP, speaking on the Gallery Stage at 10:10am as he explains the merits of infrastructure investing. The team will also be at Stand 48 where a limited supply of their tomatoes will be on offer – first come first served!
RISK WARNING: Investment through Amberside ALP places your capital at risk and returns are not guaranteed. Potential investors should read the Information Memorandum in full, paying particular attention to the risk factors section, before making any investment decision. The Information Memorandum is available at ambersideALP.com. All information provided is accurate to the best of Amberside ALP’s knowledge, however cannot be relied upon as investment advice. We recommend you talk to a qualified financial adviser before making any investment decision. Investment is only open to those for whom it can be assessed as suitable. This document is a financial promotion approved by Amberside Capital Limited which is authorised and regulated by the Financial Conduct Authority (FCA No. 706218). Amberside ALP is not authorised or regulated by the FCA and investments in the bonds are not covered by the Financial Services Compensation Scheme.