Alternative Investing with Josh Ziegelbaum

george grombacher 0:00
Come on well I’m left with is Georgie and the time is right look at today’s guest struggle powerful Joshua bomb. Josh, are you ready to do this?

Josh Ziegelbaum 0:18
I am George. It’s great to be here with you. Good morning.

george grombacher 0:21
excited to have you on Good Morning. Indeed, Josh is the director of Investor Relations at the legacy group. They’re an alternative asset manager focused on profitable investment opportunities with high social environmental impact in Latin America. Just tell us a little bit about your personal lives more about your work and why you do what you do.

Unknown Speaker 0:40
Sure, let’s start with my personal life. So I’m originally from central New Jersey was born and raised there, went to college at Rutgers University, studied economics and at a school started working in financial services. So I did a nice stint at Wells Fargo and Wells Fargo Advisors climbed my way through the ranks there over a number of years, most recently, as a private banker, before stepping down, had an opportunity to do a lateral transfer to Miami back in 2018. So I’ve been here for four years now. It’s been a great four years, I might say. And essentially two and a half years ago, I was looking for something kind of more rewarding, more interesting that provided more value than the cut and dry stuff I was working with at the bank, and I got an opportunity to hop into private equity. I’m currently the director of Investor Relations for legacy group, as you mentioned, we identify passive investment opportunities for investors in Latin America. And we’re very active in our role in bringing those companies to fruition and delivering long term value to our stakeholders. And we have about 250 investors over three funding rounds going into our Series C next month in July. And, yeah, we’re doing some really special things at our portfolio company, Green Coffee Company, soon to be the largest coffee producer in Colombia. And we’ve done that within primarily investor capital from the US, hence my US presence but but we have a team who’s based down in meta gene, who runs the day to day of the portfolio companies and really great management team there. And I love being a part of what I’m doing.

george grombacher 2:17
Very few things are the actual opposite of of something, but we’re doing what you’re doing. Now, how different is it from working with Wells Fargo,

Unknown Speaker 2:27
there’s some parallels, you know, I work with high net worth clients. So you know, our typical investor places 100 to 250,000, with us, and that’s kind of the sweet spot of the portfolios that I was sort of managing at for the, for the high net worth clients to the bank. So similar kind of investor profile, but the people are nicer, I think, in the private investment space, they’re, you know, they’re more open minded, I would say, at least from an investment perspective, so I meet some really cool people. But the work is very different, you know, we operate, obviously, in a professional manner, it’s a financial services firm. So there are some parallels. But you know, it couldn’t be more different from a structural perspective, because at the bank, you’re operating in a box, you know, you have to literally, there’s literally a handbook, and you have to follow everything in enemies, small companies have that as well. But it’s more dynamic with a smaller team, if something in the handbook doesn’t make sense, you can, you know, pivot and adjust, where in a big corporate structure, it’s just so difficult to be nimble and make changes for the better. So when you see something, that would be such a great thing, you can really implement it at a smaller asset management firm, as opposed to, you know, big box financial institution. But you know, there are some parallels, you know, we’re we’re a steward of our investors capital, you know, we have to communicate with them and be professional and, you know, do what’s right by our clients. So there’s parallels there for sure.

george grombacher 3:57
Yes, certainly, you want to take the good stuff with you. And from a compliance standpoint, and all that people are, obviously if they’re going to give you large sums of money, they want to make sure that everything is going as it’s been expressed, and expectations are maybe we can get into that a little bit. But that’s going to be a little bit different than traditional investing. So maybe that’s, I am super curious about that. When somebody is considering investing with you mentioned, you’ve got 250. And this is such an exciting and growing project, and you’re probably going to be taking on more funding as it continues to grow. But how do you communicate expectations to investors would be investors?

Unknown Speaker 4:40
Sure, sure. So we have an email newsletter, which goes to our prospective investors as well as our existing investors. And then we have it carved out for existing investors specifically for certain communications that would only be applicable to them. So I guess our general updates would be videos from the farms, interviews with management team articles that we write, maybe we release podcasts that we’ve been on such as this. And we’ll provide kind of our thought leadership content around alternative investments, agriculture, Latin America, and we kind of continuously educate our investors and potential investors on the asset class and on the industry. And then for our investors, you know, we do formal quarterly updates, so we issue written reports that are very thorough, consolidated financial statements. And then we follow up that quarterly update with a webinar, where we do live q&a with management, and really kind of dive into performance for the quarter and answer, you know, investor questions. And then we’re, of course, available in between these quarterly updates, you know, our investors can contact us by email or get in touch and schedule a call. So we’re very communicative with prospective and existing investors. And, and I’m very proud of, of that, of how we run things at Legacy group in that regard.

george grombacher 6:05
If that makes sense. It strikes me that your timing, maybe could never be better, because we’re going through, I don’t want to, we’re going through a lot of changes, we’re going to see interest rates going up, which we are, which I think is going to change the way that people are interacting with the stock market. And we have a new asset class with cryptocurrency. And so I feel like people are probably more open to exploring opportunities outside of United States companies. And then there’s a lot of conversations about sustainability and ESG. How have you seen that? Am I close to my way off?

Unknown Speaker 6:43
You were very close, I mean, you hit the nail on the head. I mean, we’re checking so many of the boxes that investors like the categories that investors are flocking to now, you know, with, with the instability you’re seeing in the US public markets, people want alternatives, right, they’re looking for early stage private investments, private real estate investments. So there’s a ton of activity in like the syndicated real estate space, and there has been for some time now, but I expect those trends to continue. And more and more accredited investors are becoming interested in alternative investment opportunities that were not available to them, you know, 510 years ago, and there’s a lot of buzz, there’s an activity in that space. And that’s just that’s in the alternative asset space. And then out, if you unbox that, and you look to Latin America or other markets, there’s also interest in exposure to other markets. So investors want alternatives first and foremost, and then they also want exposure outside of the US. So we have a US funding structure in terms of our holding company. So we make it easy and frictionless for investors to get access by issuing common equity here in the states in a company that owns all the assets in Colombia. So we make it very simple for them. But they get exposure to another market, our investors are heavily allocated to us assets, whether that’s the home that they own investment properties, the stocks and bonds that make up their portfolio are almost entirely domestic, so to speak, in the US and, and now that it’s people, you know, are opening their eyes to saying, I don’t want 100% of my portfolio in the US, I want to carve out a slice and, and move it to emerging markets. And then when you think of emerging markets, people used to, or maybe still they think of Asia, right? And then with everything going on now and that part of the world, I mean, that’s not a place, I want to be deploying my capital, and I’m hearing the same from my investors. So we’re checking that as well. So we have the emerging, we have emerging markets, we have alternative investments. And then on top of that, agriculture or commodities, right, there’s been a boom in commodity prices in the last 12 to 18 months. I don’t expect that to slow down right now. I mean, coffee commodity prices have more than doubled recently, and, you know, with all the supply chain pressures and kind of macro economic upward pressures on pricing. I don’t expect that to slow down in the next five to 10 years, right. So commodities are a place people are want to be to hedge against inflation. And they also want to be in real assets. So farmland, commodities, urging markets alternatives, we check a lot of boxes that people are looking at, or categories that people are interested in looking at. And then you know, there’s one that you mentioned that we didn’t even talk to, which was ESG, and impact. So it’s most certainly an impact investment. That’s kind of the ethos of what we do at Legacy group is making investments that produce high social and environmental impact on all stakeholders, not just our investors, but you know, the communities in which we operate. If we provide formal employment, we’re really lifting up the communities, employing single mothers in our greenhouses using environmentally sustainable planting practices, reducing tons of waste from the environment. I mean, we don’t lead with that. Because, you know, you know, we’re financial first and foremost. But no, it’s we’re doing a lot in the ESG space as well. So I have seen a big increase in interest in what we’re doing in the last year, you know, we’ve been growing exponentially, and we’re just getting started. So we finished our series B funding round at the end of 2021. Going into our Series C now in July, which we’re expecting to launch, probably around mid July, is my expectation. And, yeah, I’ve been encouraging your listeners, if you’re interested in learning more about what we’re doing, you know, get in contact with us subscribe to our newsletter. Maybe we can put some links to that show notes here. I’m happy to provide those details as well, at the end of the, at the end of the interview here. Great.

george grombacher 11:05
So what what, what my experience be I invest $100,000 in this upcoming series, see, what is that? What is my time horizon? What is my experience going to look like? Theoretically?

Unknown Speaker 11:18
Sure, from an investment perspective, you know, funding is done into our account here in the US, JPMorgan Chase, so we bank domestically, and we issue common equity in our Green Coffee Company holdings, which is a holding company here in the States. So you would get common equity as if you own shares in any private company here in the US, however, you would get access to the assets in Colombia. As we mentioned, we have about 5000 acres of coffee farmland and several million trees in the ground, world class processing facility, all that is owned by our investors, who invest at the holding company level here. So upon receipt of the commitment, you know, we confirm that we set you up with an invite to our investor portal, all of the quarterly updates are uploaded there. And you’re gonna get our regular newsletter that’s investor specific, as well as the general newsletter in order to stay updated regarding your investment. In terms of a time horizon, we’re forecasting a 2026 Exit Through IPO. So we’re looking to continue to scale the business through acquisition and position ourselves for an IPO in 2026. So about a four year holding period is what we’re anticipating. We’re also dual tracking the business for sale. So Should an opportunity present itself for us to offload the business to like a Nestle or Starbucks, you know, we’ll certainly entertain that. So it’s somewhat of like a roll up investment strategy. And then we’re building a monster basically. And then we’re gonna offload into public markets or, or get bought out. And then that’s, that’s the strategy. In terms of a expected return, we’re forecasting a 53% annual IRR, which works out to 8x net equity, multiple on invested capital. So on 100,000, you know, we’re forecasting a $800,000 return in our current financial model in the series C Dec. Exciting our investors could could expect

george grombacher 13:19
when you said at the top that you are, I think currently the second largest producer of coffee and Colombia and maybe going to be the largest. That’s that’s hard to get your brain around. My perception is that there’s just coffee everywhere in Colombia. So

Unknown Speaker 13:32
he got that right. So yeah, I mean, the coffee business areas highly fragmented. It’s mostly made up by smaller landholding families. So there aren’t a ton of big players like gods were really disrupting the industry more than anything. So I mean, if you look at who is the currently the largest, like, I don’t want to mention their name on this recording, but we visited their facilities. And you know, the infrastructure is so antiquated. It’s like something from like 50 years ago, and we’re providing we’re implementing, like World Class techniques that we’re pulling from Brazil developed Europe and really combining a lot of different strategies in the advanced agricultural space and applying them there. So we’re lightyears ahead of the competition. And it’s really, you know, smaller families that own the majority. So when I say that we’re the largest, we don’t own the majority of the coffee farmland in Colombia. We’re just the largest player.

george grombacher 14:32
Got it. That makes sense. 5000 acres and several million trees also kind of hard to get your brain around, but that’s and growing. Like, how much coffee day? Do you know I’m sure that you do how much coffee you’re producing in a given year.

Unknown Speaker 14:49
It depends, you know, it’s seasonal in nature. So it really depends on on the harvest of the particular year. Right now we’re planting it tremendous amount of trees on the existing farmland. So you know, we’re looking to scale the growth. But it’s we sell containers of processed coffee. So we’re not selling by the bag, we’re selling 10s of 1000s of pounds at a time. And we have the ability to not only produce it on our own farmland, but we have capacity in our facilities to buy cherries from neighboring farmers and process those and grow revenues as well. But we’re building out a significant amount of capacity now. And I can provide some more details which you guys reach out and and request our investor presentation or follow us, we’d be happy to share more granular details of the project.

george grombacher 15:44
That’s great. I mean, I’m sure it’s fascinating, just from your perspective, growing up in New Jersey, and I don’t know if there’s a lot of coffee getting created in New Jersey, and I guess it does matter. But just getting to learn about the coffee industry and how it actually works. And then to be able to take more modern techniques and using technology. I’m sure that that benefits you so much with figuring out what kind of new trees to be planting and and how to maintain the existing and making forecasts based on that. I’m sure it’s fascinating.

Unknown Speaker 16:19
Oh, yes, very, very much. So it’s a very rewarding work. And we have a great team, you know, at Legacy group and Green Coffee Company.

george grombacher 16:28
So love it. Well, Josh, people ready for that difference making tip? What do you have for them?

Unknown Speaker 16:34
Yeah, I mean, I would, you know, when you look at, at large objectives or goals, they’ll often seem overwhelming. But if you kind of take a step back, and you do it chip away every single day, little by little, you would be impressed by what you can accomplish over six months or a year. So I mean, I would set big goals and hold yourself accountable to those, you know, you need an accountability partner if you’re if you’re working at something alone. So, you know, I think working in a team and really, you know, chipping away at your long term goals, like day by day, week by week will really open up tremendous opportunity.

george grombacher 17:15
Well, I think that is great stuff that definitely gets caught. Josh, thank you so much for coming on. Where can people learn more about you? And where can they learn about legacy group and the new opportunities, but the Coffee Company and all of it?

Unknown Speaker 17:28
Sure, you can find us on our website at Legacy dash group.co. And you can drop us an email investor dot relations at Legacy dash group.co. And if you visit our website, you can subscribe to our newsletter. So definitely subscribe to our email newsletter that’ll keep you informed. Reach out to us love to connect.

george grombacher 17:49
Excellent. If you enjoyed as much as I did to adjust your appreciation and share today’s show with a friend who also appreciates good ideas and loves delicious coffee, go to legacy dash group.co and then shoot Josh a message at Investor Relations at Legacy dash group.co and get set up for that newsletter and see if this is an opportunity to take part in that series C funding which is just around the corner. Thanks again, Josh. Thanks, George. And until next time, but the good fight is we’re all in this together.

Transcribed by https://otter.ai