Blue Road closes debut fund on $433m – exclusive

Blue Road Capital has held a final close on its agriculture-focused debut fund on $433 million, the firm has said.

Co-investments raised after this final fund close are expected to see Blue Road reach or exceed its overall fundraising target, according to the firm. A person with knowledge of the matter said that target was $750 million, with a hard-cap of $1 billion.

Senior portfolio manager of real assets at the New Mexico Educational Retirement Board, Mark Canavan, said the pension has already co-invested into National Pecan, one of the fund’s assets, and the opportunity for co-investments factored significantly in NMERB’s decision to commit $30 million to Blue Road Capital.

“The feedback process from a co-investment is very profound,” said Canavan. “It provides a tremendous amount of see-through in the market.”

Blue Road has now scaled up through acquisitions of Texas-based Young Pecan and Georgia’s Poulan Pecan in 2015. Other limited partners have also made co-investments, according to Blue Capital.

Last August the fund and co-investors spent $250 million on Washington State-based produce distributor, Vanguard International.

Canavan previously told Agri Investor that initial returns have been strong. “I would have loved to double down on [Blue Road],” he said. “But we would have had to cancel another commitment. It’s not for lack of wanting to.”

Blue Road Capital’s buyout fund was launched in 2014 to invest in agricultural production and supply-chain companies. John Duryea formed Blue Road in 2013, spinning out the management team from hedge fund Ospraie Management’s $1.2 billion Special Opportunities fund, which was predominantly allocated toward agriculture investments.

Chuck Stanley contributed to this report.