Cibus Capital raises $650mn for food and agriculture funds

March 6, 2024 (Preqin News) – London-based investment advisory firm Cibus Capital has raised nearly $650mn from two funds targeting investment in sustainable food and agriculture food production.

Cibus has closed its second mid-market private equity fund, Cibus Fund II (CF II), with $510m in commitments, and its second venture fund, Cibus Enterprise Fund II (CE II), with $135m in commitments. Cibus Fund II targets mid-market growth/buyout investments in food production and processing businesses, while Cibus Enterprise Fund II invests in late-stage agri-food technology companies.

The funds secured capital from investors including the Los Angeles County Employees’ Retirement Association (LACERA) and Australia’s Retail Employees Superannuation Trust (REST).

The two funds are significantly larger than their predecessors: CF II is 58% larger than its forerunner while CE II is 106% larger.

The announcement of the fund closures follows a period of increased tension within the agricultural sector that has seen widespread demonstrations by farmers in Europe and other parts of the world.

‘Farmers and landowners have taken center stage in the debate about food security and environmental conservation,’ said Rob Appleby, Founder and CIO of Cibus Capital, in a statement. ‘This coincides with a clearer view of the risks and opportunities faced by investors and stakeholders alike in food production. ‘

Farmers have gathered in European capitals including Paris, Berlin and The Hague this year to oppose new policies such as the Green New Deal, which will require some farmers to alter their practices to help meet climate change objectives. Some of these requirements include reducing fertilizer by 20%, conducting more crop rotations, and devoting at least 4% of their arable land to non-productive features.

Meanwhile, climate change continues to be a concern for investors. According to Preqin’s The State of ESG: A 2023 Retrospective: ‘Investors may seek to mitigate future [environmental] damage by committing to low-carbon assets, technologies, and strategies that could reduce the negative impacts of their portfolios’.

CE II will invest in late-stage venture for companies that aim to disrupt food production or processing, increasing resource efficiency and sustainability, and has already made 10 investments in areas such as robotics, precision chemistry for crop protection, and natural capital.

‘Agri-food technology provides the potential for unprecedented positive change across resource efficiency, GHG emissions, biodiversity, food security, human health, and animal welfare,’ said Alastair Cooper, Head of Venture of Cibus Capital. ‘We are excited about the possibilities to come, deploying capital to innovative companies supporting the technological revolution much needed in our food system.’

According to Preqin data, there are currently 80 funds in market with exposure to agriculture and farmland, seeking an aggregate $11.5bn in capital. Total raised capital increased to $3.7bn in 2023 from $2.4bn a year earlier, despite fund closures dropping to 12, the fewest since 2009.