EXEO Capital, the pan-African private equity investment firm, has announced the first close of the second Agri-Vie Fund, focused on the food and agribusiness sector in Sub-Saharan Africa, after attracting commitments of over $100 million, one third more than the initial target.
“This first close is building on the momentum of Agri-Vie Fund I, which is now in its realisation stage. Since inception in 2008, Agri-Vie has developed a proven track record in identifying strong performing food and agribusiness portfolio companies in Sub-Saharan Africa,” says Herman Marais, EXEO Capital Managing Partner.
Fund I is invested in 12 portfolio companies across East and Southern Africa, including South Africa, Mozambique, Tanzania, Kenya, Rwanda, Uganda and Ethiopia, and has been “successfully unlocking value for investors while making a real and positive impact in the communities and regions it invests in,” he adds.
“The first close of Fund II is a 33% over-subscription on the initial target, supported by a core of Fund I investors as well as new investors. The Fund will remain open for additional investors for another 12 months with a target of $150 million and a hard cap of $200 million,” he says.
Norfund – the Norwegian Investment Fund for Developing Countries – has been invested with Agri-Vie Fund I since 2010 and has worked closely with the management on establishing fund II. “Agri-Vie is an important partner for Norfund” says Kjell Roland, Norfund Chief Executive Officer.
“There is a considerable investment deficit in the food and agribusiness sector, and we are pleased to see that our investments in this sector also can help catalysing other private investors,” says Roland.
Agri-Vie invests across the broad food and agricultural sector, capitalising on the thriving African markets for processed food as well as export opportunities. Its portfolio companies include dairy, proteins (beef, poultry, aquaculture products and plant protein), condiments, fresh convenience foods, non-alcoholic beverages as well as food ingredients. The Fund, whose institutional investors come from Africa, Europe and North America, also invests in businesses specialising in agri-inputs such as seeds, plant nutrients, crop protection, and food logistics.
“The Agri-Vie Funds give investors an opportunity to participate in a diversified range of growth investment opportunities in the food and agricultural sector of the sub-continent,” says Patrick Mamathuba, Stanlib Asset Management Head of Alternative Investments.
“These opportunities are supported and driven by distinct structural factors and trends, which include rapid urbanisation leading to increasing demand for processed food products, large-scale import replacement opportunities in several of the countries where the Fund operates, as well as the availability of new technologies to enable precision farming and efficient agro-processing at lower risk,” explains Mamathuba.
EXEO Capital, which manages Agri-Vie Fund II, operates from offices in Cape Town, Nairobi and Mauritius and has representation in other major centres such as Johannesburg, Dar Es Salaam, Addis Ababa, Lusaka, Kampala, and Accra.
“This strong local presence enables the investment team to understand local conditions and ensures that the best companies are selected for investment,” says Marais.
“By investing in middle to lower cap companies that have a successful track record and exceptional growth prospects, Agri-Vie plays an active shareholder role in its portfolio companies, supporting them to achieve growth and profitability targets,” he explains.
“Our philosophy is to actively help to build the success of our investee businesses rather than being a passive investor.
“We also work actively with our partner companies to achieve their best development impact on local communities through employing and procuring locally as well as improving social infrastructure such as schools and clinics. The 12 portfolio companies of the Agri-Vie Fund I support more than 8 000 jobs in the communities where they operate. We also expect of our partner companies to join us in upholding internationally recognised standards of environmental and social governance.”
“The establishment of Agri-Vie Fund II adds an important milestone to the momentum of institutional private equity investment in the food and agri sector of Sub-Sahara Africa. The first close of the Fund demonstrates increasing confidence among investors in the sector and region,” concludes Marais.