AMERRA eyes ESG investments in North America

Managing director Chris Chapman says the senior secured loan to Cooks Venture is one of three debt investments the firm has carried out in North America, where it sees increasing ESG investment opportunities.

AMERRA Capital Management’s recent North American lending has revealed opportunities in line with the firm’s sharpening focus on environmental, social and governance factors, says managing director Chris Chapman.

Historically focused on providing loans to Latin American agribusinesses, AMERRA  extended a $12 million senior secured loan to Cooks Venture, which produces pasture-raised, slow-growth heirloom chickens in Arkansas, earlier this month.

This followed an earlier loan to an unnamed West Coast wheat merchant, and another to Lexington, Kentucky hemp processor Elemental Processing.

“It’s exciting when you can find good opportunities in the US,” said Chapman, who joined AMERRA in October after eight years at Deutsche Bank and currently oversees the firm’s debt investments outside of Brazil.

Head of capital markets David Gould told Agri Investor the Cooks Venture loan reflects a broader effort to further elevate ESG factors in AMERRA’s strategy, which has been built upon reporting the firm has carried out since 2012, as part of its financing facility from the International Financing Corporation.

This wider effort includes the addition of an ESG specialist, Santiago Cortés, with responsibilities across AMERRA’s entire portfolio, Gould said, and affiliation with the UN Environmental Program’s Finance Initiative.

“You still need to be an expert in the underlying sector of whatever it is you are investing in, but if you do not expand your focus to include this new criteria [ESG], you are going to lose investor interest,” Gould said. “It used to be just lip-service you could pay; now you actually need to identify how it is that you are employing these best practices.”

Back to the future

AMERRA makes debt and equity investments from distinct vehicles, Gould explained, and is currently investing from the third iteration of its flagship lending strategy.

Whereas traditional lenders may have been discouraged by Cooks Venture’s entrance into a poultry market dominated by large, established players, AMERRA’s loan grew from a conviction that consumers will respond positively to the company’s offerings, Chapman said.

Over recent decades, he explained, the poultry industry has focused on chickens that add muscle quickly, resulting in birds with a limited number of muscle fibers that are engorged to create large breasts with limited moisture and taste.

Drawing on research carried out through predecessor entities that goes back about a decade, Chapman said, Cooks Venture has developed a breed of chicken that is heat-resistant, has strong legs and experiences slower growth that produces a greater density of muscle fibers and meat that is juicier.

“This is kind of back to the future,” said Chapman. “They basically have reached back into some of the genetics from the past, from before they were taken over by the commodity chicken, and have developed a breed well-suited to this lifestyle.”