Avrio holds C$65m first close on late stage agri fund

The Farm Credit Canada spin-out has raised just over half of its C$125m target.

Agribusiness-focused Avrio Capital has held a C$65 million (59 million; €45 million) first close on its fourth late stage venture vehicle, Avrio Ventures Limited Partnership III. The Calgary-based firm spun-out of Farm Credit Canada in 2002.

The first close comprised commitments from two existing investors whose identities have not been disclosed. Export Development Canada, Canada’s export credit agency, and Farm Credit Canada, one of Canada’s largest agricultural lenders, have both invested in all three previous Avrio Capital vehicles.

Avrio began marketing its latest offering in April with a focus on attracting institutional investors and is targeting a C$125 million final close by the first quarter of 2015, according to founder and partner Jim Taylor. He added the target could be reached sooner.

“Our investors are likely to be small institutions or family offices, with a minimum commitment expected of $4-5 million,” said Taylor, who acknowledged agri investment was becoming popular with some generalist fund managers. “But even with interest in ag increasing significantly the number of funds out there is still limited. There’s still a long way to go in terms of multiple financing options for agriculture and agribusiness, we’d like to think we were trendsetters in that respect,” he said, referencing the firm’s history as a part of Farm Credit Canada.

The firm’s Fund II, which closed on $99.2 million in 2011, is now fully deployed, having invested in 12 companies. A similar number of portfolio companies are being targeted for Fund III. “We are looking to invest in advanced agriculture companies companies that focus on sustainable production processes and which help farmers improve yields, get fresh produce to consumers quickly and produce healthier food options for customers,companies that focus on sustainable production processes and that” said Taylor.