Black River spins out agri and food assets

Cargill subsidiary Black River Asset Mangement has spun out the lion’s share of its agriculture, food, metals and mining  assets into a “natural resources-focused” private equity firm called Proterra Investment Partners.

The new advisor and private equity fund manager, which has more than $2.1 billion in committed capital, has “retained all related funds’ limited partners and fund commitments”, according to a company statement.

Proterra’s investor relations manager, Ned Dau, added there was no change to the terms or leadership of the funds.

Agriculture investor and trader Cargill said it would dismantle its $7.4 billion asset management unit, Black River, in September, in the face of weak investor demand for its hedge fund strategies, as well as its private equity business.

“Leadership of Black River and Cargill determined that the LPs of the funds would be better served if these were independent asset management companies,” said Dau. “We think that we will be more focused with just a private equity firm and potentially more nimble in terms of our investments.”

Black River Agriculture Fund 2, an own-and-operate farmland fund, had invested primarily in row crops in Australia and Latin America by September last year, and attracted commitments and co-investments totalling $587 million.

Fund 2, which closed in November 2014, followed the $194 million Agriculture Fund 1 which closed in January 2011. There is also an agriculture co-investment fund, which follows a standard co-investment structure.

Dau said that all three strategies have funds available to invest, though he declined to comment on the amounts remaining to deploy for each fund.

Also in November, the Black River Food Fund 2, a private equity fund focusing on investing into the food and agribusiness value chain, closed on $700 million, its hard-cap. Food Fund 1 was a 2011-vintage which closed on $455 million, and is fully invested in Latin American and Asia-Pacific  busineseses. As with the agriculture strategy, Black River’s food sector has a co-investment fund.

Food Fund investments include raw milk production in China and India, poultry production in Thailand and beef production in Brazil, Michelle Tressel, a spokeswoman for Black River, told Agri Investor previously.

The Dutch pension fund manager PGGM invested between $50 million and $100 million into each food fund, a spokesperson told Agri Investor earlier last year.

The firm, which is now employee-owned, has $782 million in three funds committed to agriculture, $1.2 billion in three funds committed to food and $165 million in one fund committed to metals, according to the firm.

Proterra is temporarily operating from a Cargill facility west of Minneapolis, and has selected a location in downtown Minneapolis to move its operations.