Between 2010’s disastrous Gulf of Mexico oil spill, the near collapse of the Chilean salmon-farming industry and increasingly restrictive U.S. fishing regulations, the climate for investing in commercial seafood might not appear all that appealing.
But to private-equity groups familiar with the industry’s peculiarities and profit potential, seafood businesses make sense — and even dollars. The combination of soaring global demand for the protein, advances in aquaculture and the human race’s unending craving for new flavor twists has become a clarion call to cash-carrying members of the investment set.
Investors knowledgeable in the field understand buying into a seafood company is a multi-year commitment leading to an endgame sale worth several times the initial outlay. Not a razzle-dazzle ride to super profits, but a sound play in a marketplace fraught with peaks and troughs that render even stalwart investors green in the gills.
Andrew Gould, president of Arthur P. Gould & Co., says outside investing in the seafood industry ebbs and flows cyclically, and currently the tide is rising a bit.
“We will see a continuing cyclical inflow of direct private-equity investment from institutional investors,” begins Gould, whose merchant banking company specializes in wild fisheries and aquaculture. “I think the (seafood) industry attracts the attention of these investors who notice that the industry as a whole is underfinanced and diverse.”
Translation: The commercial seafood industry will benefit from fresh capital and unification, two influences currently making modest ripples in the water. “In general, I think that larger seafood industry players who have weathered the balance-sheet de-levering of the past couple of years are in a good position to drive species- and sector-specific consolidation,” Gould says.
Click here to read the rest of the feature on investing in seafood, which was written by SeaFood Business Contributing Editor Steve Coomes and appeared in the magazine’s October issue.
