DBJ first Japanese investor to back a food-focused PE fund through Proterra Investment.

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Global AgInvesting | 27 September 2021
 
DBJ first Japanese investor to back a food-focused PE fund through Proterra Investment.
 
By Lynda Kiernan-Stone
 
The Development Bank of Japan (DBJ) continues to break ground as an investor, becoming the first in Japan to agree to invest in a food-focused private equity fund by backing a fund managed by Proterra Investment Advisors (Proterra Asia).
 
Spun off from Cargill’s Black River Asset Management in 2016, Proterra has offices in Minneapolis, Shanghai, Singapore, Mumbai, Sydney, Sao Paulo, and London. Working out of the Shanghai and Singapore office, Tai Lin, managing director of Proterra Asia, directs Proterra’s food sector investments across China and Southeast Asia.
 
“With regards to the activities of the Food Strategy, which is focused on meeting food demand, we see emerging Asia as the biggest, strongest driving force in the growth for food globally,” Lin told GAI News in a previous interview.
 
This view has just been confirmed by the numbers – a new joint report released by PwC, Rabobank, and Temasek found that Asian consumers are expected to double their spending on food reaching $8 trillion by 2030, making it the largest food and beverage market in the world.
 
Leveraging its extensive network in the global food and agriculture sector gives Proterra a strong strategic edge. Using this edge, the fund backs high-growth Asian food companies that capitalize on and benefit from the region’s middle class population growth and shifting patterns of food consumption resulting from demographic changes.
 
For instance, the fund has completed investments in companies in fast-growing sub-sectors within the food space, such as alternative foods like oat milk or plant-based eggs, capitalizing upon growing consumer awareness of health, nutrition, and sustainability.
 
Through its Food Strategy, Proterra has invested in more than 20 companies active in the Asian food sector since 2010, creating value at the portfolio level, whether through expansion of sales and procurement channels, strategic M&A, and/or by incorporating best practices in corporate governance.
 
“There are not a lot of sizeable, pan-regional PE firms that are focused on food and agriculture,” Lin previously told GAI News. “The focus on the sector makes a difference as we navigate our deals – it’s easy for us to find operators, we know people in the right places, and we can easily make the connections.”
 
For Japan and the World
 
For DBJ, this investment aligns and manifests its corporate philosophy – “Design the future with financial expertise: Continue to expand financial frontiers; Provide the best solutions for customers and society; Pursue sustainable development for Japan and the world.”
 
Through this investment, DBJ intends to not only stimulate activity in the food and agriculture industries, but to also seize on global trends and industry best practices in the food transition, contributing to the industry’s next phase of growth.
 
Looking to the future, DBJ stated that it will continue to create diverse financial solutions to actively drive the future development of the food and agriculture industries in Japan. 
 
However, food and agriculture are not the only alternative asset classes where DBJ has recently taken action to foster growth.
 
Earlier in September, the bank announced its intentions to foster a shift toward greater exposure for Japanese investors to forestry through its investment in the TIR Europe Forestry Fund II. 
 
Timberland is rapidly gaining credibility as a prime alternative investment for gaining environmental, social, and governance (ESG) benefits for portfolios. As such, demand for these kinds of sustainable alternatives continues to strengthen among the pension and institutional investor space as part of their broader commitments to climate change mitigation and sustainability.
 
A major factor driving the increased investment activity in the asset class is the UN’s Principles for Responsible Investment forecast that corporate demand for carbon removal and offsetting could represent $800 billion annually for investors by mid-century, along with initiatives such as the universal consideration of the SFI standard. This standard acknowledges the impact on the use of sustainable forestry practices on the capacity of working forests to sequester carbon and other greenhouse gas emissions.
 
Through this investment DBJ stated that it hopes to bolster the material knowledge and skills of Japan’s financial institutions, and to play a role in contributing to the regeneration of the country’s forestry industry.
Original source: GAI
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