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Private Equity Fund Managers Investing in the Food & Agriculture Sector – December 2014

by Chloe Wong

  • 16 Dec 2014
  • PE
  • NR

In order to add diversity to a portfolio, a number of GPs may consider investments in the food & agriculture sector. Investments in unconventional agricultural assets are gaining interest from fund managers as they seek to take advantage of changing consumer demand. Preqin’s Buyout Deals Analyst details 188 buyout deals in the food & agriculture industry this year; this blog takes a look at the fund managers that consider investments in these sectors. 

According to Preqin’s Fund Manager Profiles online service, there are currently 1,491 private equity firms that invest in food & agriculture as part of their wider industry focus. Of these, North America-based fund managers account for the largest proportion (41%), while Europe- (24%) and Asia-based fund managers (21%) also invest in the sector.

As shown in the chart above, North America-based private equity firms have secured $491bn in aggregate capital commitments in the last decade from funds that target food & agriculture in their industry focus, double the amount raised by their Europe-based counterparts. Buyout is the most prominent strategy for North America-based fund managers, with Paine & Partners currently raising the largest buyout fund, Paine & Partners Capital Fund IV, targeting $850mn for investments exclusively in the food & agriculture industry. 

The firm that has raised the largest amount of capital over the last decade, focused exclusively on the food & agriculture sector, is AMERRA. The New York-based firm has collected almost $900mn in the last 10 years and has an estimated $143mn in dry powder commitments. Its most recent fund, AMERRA II, raised $535mn in 2013 and invests in private agricultural firms in South, Central and North America. 

As population continues to grow, it is important that investments are committed to these sectors to match the world’s global demand for food. 2015 looks to be a promising year for the food & agriculture industry, as there are currently 220 funds in market that include the sector in their industry focus. These funds are targeting $74bn in commitments, 22% of which has already been secured from funds which have at least reached an interim close.

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