Conference Presentation, Fireside Chat, Panel
The Sustainable Investing Challenge: Innovative Plans from a New Generation
Milken InstitutePaul Irving, Ryan Alam, Suzana Amoes, Dave Chen, Megan Strawther, Susanna Amos, Thomas Witt, David Bank, Amit Boren, Cameron Saul
- The Morgan Stanley Sustainable Investing Challenge will be held in Hong Kong with a focus on interactive participation from investors and policy makers regarding young student teams' ventures in financial, social, and sustainable returns.
- Dave Chen intends to highlight industry shifts over the last six years and expects future competition teams to advance beyond concept presentation into execution, citing 2014 winners pursuing land development pilots and 2015 winners progressing product development after securing approximately $500,000 in grants.
- The Milken Institute plans to establish a fellowship to support winning teams with 18 months of development funding, mentorship, and potential integration into a financial services firm.
- The Terra Limpa team aims to raise $30 million across three investor tiers—Class A (short-term/low risk), Class B (long-term/for-profit), and Class C (concessionary/governmental)—to acquire 5,500 hectares of farmland in Angola's Huambo, Benguela, and Kwanzaa Sul provinces, with plans to scale across southern Angola and replicate the model in sub-Saharan Africa and Southeast Asia.
- Revenue generation strategies include distributing 100% of residual cash flows as dividends after covering operational costs, with a structure where Class C investors enter first and exit last, while Class A has the shortest horizon, designed to accelerate land ownership for farmers within five to seven years.
- Operational plans involve clearing contaminated land at a rate of three hectares daily at a cost of $550 per hectare using certified UXO technicians, while securing land titles through engagement with municipal and provincial governments.
- Crop selection focuses on cassava and potatoes as resilient staples with high urban margins, supported by input partnerships with organizations like Syngenta and One Acre Fund, alongside a distribution network connecting farmers to buyers such as ShopRite and the Angolan Army.
- Financial structuring includes deducting 20 to 30 percent of farmer income into savings plans to facilitate land purchases, paying farmers 70 to 80 percent upfront, and mitigating risks through US dollar-denominated contracts, contractor liability insurance, and contingency funds.
- The Angolan government supports this initiative through economic diversification incentives, including up to 100 percent tax breaks, crop insurance subsidies, and loan guarantees, amidst expectations that food demand will outpace domestic production.
- Immediate next steps involve field research in Angola in June, the potential launch of a pilot project in January of the following year, and a return to the Milken Institute Global Conference in 2017 to pursue fundraising, while participants are advised to defer formal subscription agreements despite expressed investor interest.