Africa’s largest private sector investment manager, Old Mutual Investment, is increasing its equity stake in UFF African Agri Investments, a partnership between Old Mutual Investments and South African firm Futuregrowth, to 49 percent.
“The increase is general across several funds,” joint managing director and co-founder at UFF African Agri, Duncan Vink, told Agri Investor.
“We are actively marketing a pan-African agri fund based in Mauritius, as well as a number of in-country funds where we mainly target local African investors.”
These include the Futuregrowth Agri Fund III, two open-ended Old Mutual African Agricultural funds and the Old Mutual Swaziland Agricultural Fund. Vink said Futuregrowth Agri Fund III had already held a first close on $25 million, and was currently deploying its first commitments.
“All assets are in primary production, mainly intensive farming,” said Vink, adding that the firm was actively looking at investment opportunities in east Africa, including Kenya, Tanzania, Ethiopia and Nigeria.
“We are also actively looking at a number of opportunities in Morocco … and are looking at opportunities in across the board, mainly row crops and permanent crops. We have done stuff in dairy already.”
He said investments needed to be of scale and directly linked to their market, adding that the firm could also invest in processing facilities located on their farm sites.
“Our closed-ended funds are 12 to 15 years, mainly, so we see that long-term investments are necessary,” he said.
Asked whether the current drought in South and sub-Saharan Africa would affect the firm’s investment strategy, Vink said that the fund did not invest in rain-fed farms: “We either are set near an irrigation scheme, river or bore holes, so the drought didn’t influence any of our investments whatsoever. We are weathering the situation. The current drought confirms our existing investment strategy.”
Old Mutual also said in a statement it envisaged investment opportunities of up to $500 million into African farmland over the next three years.
“Agriculture as an asset class has already gained huge momentum globally, but is still in its infancy in Africa. This presents a significant investment opportunity for both local and international investors,” said Old Mutual Investment chief executive officer Diane Radley in the statement.