Agri-Vie will launch an Agri-Vie Investment Fund II in the second quarter of 2016, as its founders form the private equity firm EXEO Capital.
The five members of the management team of Agri-Vie have set up EXEO Capital to manage the Africa-focused $100 million Agri-Vie Investment Fund I and launch the second fund. The new firm has formed an equity partnership with pan-African investment manager STANLIB to develop new investment products that go beyond food, agri and the single fund structure.
Managing partner at EXEO Capital, Herman Marais, told Agri Investor that Fund II will target a first close of $75 million and final close of $175 million, but based on interest from investors he anticipates that target will be exceeded. Marais said the investors at first close will be split 50-50 between Africa and Europe, but that by final close the fund is likely to have a similar geographical spread to Fund I, with two-thirds of its investors coming from Europe and the US, and the rest from Africa.
Marais added the bite size would probably be larger than Fund I’s $7 million average, but the strategy of the second fund would be similar with a heavier emphasis on eastern Africa and a new mandate to invest in western Africa. “The weighting of our deployment in southern Africa will somewhat reduced, and probably we will increase the weighting of deployment in east Africa and over time in west Africa.”
The fund will invest across supply chain, excluding producers. “The strategic focus remains on the broadly defined foods and agri value chain in sub-Saharan Africa, from agricultural inputs through to food and beverage manufacturing, distribution and logistics, and distribution to the end consumer,” said Marais.Agri-Vie Investment Fund I has been deployed across 12 investments in food and agriculture, spread across eastern and southern Africa.
Marais said the strategy helped insulate investments from the drought that has been affecting farming businesses in southern Africa. “As we are generally not investing in standalone agriculture or farming enterprises, the businesses in which we invest are not as directly exposed … That is one of the reasons why we generally prefer to focus on the vertically integrated model.
EXEO will have a broader remit than Agri-Vie. The team aim to invest beyond the food and agri sector in the long term and offer clients different investment models, through its partnership with pan-African investment manager STANLIB.
Marais’ firm will be able act as an independent investment manager, with access to the broader Liberty Group and Standard Bank. EXEO can then assist investment companies to seek out a wider range of debt options.
STANLIB is a pan-African multi-specialist investment company. In December last year, it managed and administersed over 579 billion rand in assets for over 500,000 retail and institutional clients across Africa. STANLIB has operations in 10 African countries.
EXEO’s assets under management will increase to $275 million once the new fund is launched.