Black River targets at least $400m for second agriculture fund
Dow Jones | LBO Wire | July 15, 2013
So far, the bulk of the financing has come as a $75 million commitment from the Teachers' Retirement System of the State of Illinois.
Black River Targets at Least $400M for Second Agriculture Fund
Black River Asset Management is targeting at least $400 million for its second agriculture-focused investment fund.
According to a person familiar with the firm's plans, the Black River Agriculture Fund 2 LP could collect up to $500 million, but will raise at least $400 million for the vehicle.
So far the fund has closed on $90.1 million, according to a filing with the Securities and Exchange Commission . The bulk of the financing came as a $75 million commitment from the Teachers' Retirement System of the State of Illinois, which was announced in May.
Black River raised roughly $200 million for its first agriculture investment fund. According to the Hopkins, Minn., firm's website, Black River's agricultural investment strategy invests in crop production, including upgrading yields and converting pasture land to crop land, on a global basis.
A 2012 report by the Oakland Institute listed some of the firm's holdings, such as aquaculture in Central and Latin America and Southeast Asia; farmland in South America; livestock and dairy farms in China and India; and fruit, vegetable and rice plantations in the Philippines.
Black River's agriculture strategy is headed by Brent Bechtle, a 26-year veteran of the industry.
Food and agriculture targeted investment funds have come into vogue in recent years as limited partners seek strategies that have hard assets associated with them. Giving these funds a boost, as well, is the overall strength of the U.S. market for agriculture land, and rising commodity prices generally.
Some private equity firms in China are moving to pursue food and agriculture investment strategies. In May, LBO Wire reported CMIA Capital Partners was raising a $150 million fund focused on food and agriculture fund while the Sino-Israeli investment firm Infinity Group was planning to invest in agriculture companies based in a new agriculture park in Beijing.
China isn't the only emerging market country where investors are looking at bolstering crop production by investing in agriculture and professionalizing fragmented local areas. For instance, the Russian firm VTB Capital set up an operating company in 2012 with $200 million in cash to make investments in Russian agriculture.
In the U.S. 2011 and 2012 were bumper years for investors raising agriculture-focused funds. Macquarie Crop Partners raised $232 million in November for its crop fund, while in 2011 Hancock Agriculture Investment Group began raising an $800 million crop fund, and Macquarie boosted its target for its crop fund from $600 million to $800 million.
Write to Jonathan Shieber at [email protected] Follow him on Twitter at @jshieber
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