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Market Fundamentals & Investment Opportunity
A funding gap exists between forecasted global infrastructure requirements and funding trends. A cumulative funding gap of US$ 5.3 trillion (assuming SGD US$ 7.8 trillion) is expected by 2030 (Source: Global Infrastructure Hub, G20 Initiative). By 2040, the cumulative funding gap is expected to reach US$ 14.9 trillion (and assuming SGD US$ 18.4 trillion).
Market Fundamentals
Agriculture
The world will likely have to produce 100% more food by 2050 to feed a projected 2.4 billion (33%) more people. Agricultural demand requirements will be stressed as soil degradation and water scarcity strain production resources (Source: United Nations' Food and Agriculture Organisation). Agriculture (real assets) has been underpinned by regulatory requirements, with a market shift to low carbon/low sulfur activities and supportive public policy. Traditional sources of U.S. bank capital and financial institutions have limited and/or exited agriculture markets.
Investment Opportunity
IAgriculture
Castalia Partners seeks to generate attractive risk adjusted returns through the acquisition, ownership and operation of agricultural (property) loans from financial institutions, the purchase of agricultural equipment and leases from financial institutions, and direct, short-to-intermediate term loans to farmers.
Renewables
Renewable energy development needs to be scaled up at least six times to meet the goals in the Paris Climate Agreement. The International Renewable Energy Agency (“IRENA”) projects by 2050, based on governments’ current energy plans and other planned targets and policies (as of 2019), the global renewable energy market will be US$ 95 trillion. To reach this level of capitalization, it is projected the market will require an investment of US$ 2.9 trillion per year.
Renewables
Castalia Partners is targeting a double-digit internal rate of return in providing U.S. flag turbine installation vessels (“TIVs”) necessary to install the 1,700 offshore wind turbines now planned for deployment in coastal waters off the northeast U.S. states over the next decade.
Transportation/Maritime
(Including Ports & Terminals)
The transportation/maritime industry is a US$ 1 trillion market that involves the transportation of nearly 12 billion tonnes of trade goods each year. Approximately 80% to 82% of world trade is transported by the global maritime industry (Source: Clarkson Research Services Ltd.). Over the past 10 years, seaborne trade has outgrown world trade by 44.4%. A cumulative funding gap of US$ 196 billion is expected for ports (only) by 2030.
Transportation/Maritime
(Including Ports & Terminals)
Castalia Partners is targeting a double-digit internal rate of return in an ESG focused strategy that will increase the output and productivity of a targeted port investment. It will also allow shipping concerns to increase loadings and their frequency, while at the same time the project will have a beneficial impact on the environment.