Amethis Finance, the African investment management firm that is majority-owned by Swiss private banking group Edmond de Rothschild Group, has closed its first fund; the Amethis Finance Luxembourg SCA SICAR fund, which will be targeting agriculture as one of its key focus sectors.
The final close on $530 million surpassed the private equity fund’s original target of $500 million after attracting demand from 40 investors, according to a press release.
The fund is the latest in a growing number that are targeting Africa; private equity funds targeting the continent doubled in size between 2012 and 2013, according to Prequin data. And agriculture is a major area of interest across this trend; last month private equity behemoth Kohlberg Kravis Roberts made its first African investment, a $200 million deal with Afriflora, an Ethiopian-based rose grower and distributor.
Amethis is targeting local and family agribusinesses that want to expand regionally and will invest across the agri value chain, according to Luc Rigouzzo, managing partner at Amethis Finance. This will include food crops, processing and distribution businesses and upstream agriculture and livestock processing, he told Agri Investor. It will also target countries with “a large domestic market and a diversified economy”, said Rigouzzo.
“Amethis has developed a strategy suited for the continent’s needs and is thus particularly positioned on Africa’s bottlenecks areas supporting urbanization and consumer growth; due to a rising urban demand, food will account for the largest share of consumer spending, growing at 5 percent per year,” he said.
But this has not always been the case and Amethis is hoping to take advantage of a developing agri industry across the continent.
“The agribusiness sector has been driven for decades by an export/survival model where rural areas were feeding themselves while large groups were exporting commodities worldwide,” said Rigouzzo. “The demographic switch in Africa has made this model obsolete. In West Africa, cereal production has been multiplied by three and roots production by five in 25 years.”
“This change has also been supported by large land and water availability,” he added. “Food consumption will switch to locally produced goods, thanks to higher local production and better infrastructure but also due to natural protection resulting from higher fuel and freight prices. The export sector is also growing fast due to a positive long term trend in food prices and commodities.”
The fund, launched in 2012, attracted investors ranging from financial institutions to European and US family offices.