Aqua closes fund on $370m hard-cap

The second vehicle from the Brazilian firm will target annual returns of up to 20% with investments in South American assets across the value chain.

Sao Paulo-based private equity firm Aqua Capital has closed its second fund above its revised hard-cap of $370 million, according to the firm’s founder.

Aqua Capital Agribusiness Fund II closed with commitments from institutional investors from North America, Europe, the Middle East and Latin America, Sebastian Popik, Aqua Capital’s founder told Agri Investor. Popik declined to identify specific investors but said investor types included funds of funds and developmental finance institutions in addition to pension and sovereign wealth funds.

“It’s been an exciting run,” Popik said, describing how the country’s recurring corruption scandals had impacted investors’ outlook on the country in recent months. “It’s a difficult moment for Brazil, but nevertheless, there seems to more clarity and people are looking at agribusiness first and infrastructure second.”

The Agribusiness Latin America II Fund was launched in 2015 with a target of $350 million and was held open to make room for investors who had been in the due diligence process since December, according to Popik, who added that the firm had not done any additional fundraising since that time.

The fund will seek annual returns of up to 20 percent by establishing sector-specific platforms of between $25 million and $100 million each that will go on to make control equity investments of between $10 million and $30 million, Popik said. Inputs and mid-market agribusiness will be the focus of the fund, which Popik said will continue the firm’s policy of not investing directly in farmland or production assets.

Geographically the Agribusiness Latin America II Fund will focus on Brazil, with potential for investments in Argentina, Peru, Chile and Colombia as well.

Popik said that Aqua has already closed four investments from the vehicle that constitute between 35-40 percent of the total fund. The investments include unspecified stakes in Brazilian feed additives company Yes; ag input distributor Rural Brazil and animal-health-focused Casa Ba Vaca.

He declined to identify the fourth investment.

Founded in 2009, Aqua typically invests in companies with annual revenues between $15 million and $150 million. The firm’s debut fund, AGF Latam Fund, surpassed its initial target of $150 million to close on $173 million in late 2013.