Food and agriculture investment firm Ceres Partners is targeting $100 million for its second private equity fund, on which it expects to reach final close by Q4 2020.
Founder and chief executive Perry Vieth told Agri Investor that Ceres Sustainable Food and Agriculture Opportunity Fund II had already secured around $20 million in commitments.
Vieth said the fund is targeting a $25 million first close in Q1 2020 and described investor types relevant for the fund as including public and private pensions, endowments, high net-worth individuals and family offices.
“Especially from the family offices, there is more and more interest in ESG,” Vieth said. “This [fund] is an interesting way [for them to] check off several of the boxes they are looking for. We think there are enough good investments out there where you don’t have to give up the return, so that’s an important factor.”
Investors making commitments within the $25 million first close for Fund II will be offered a reduced “1 and 10” fee structure, while those investing as part of the remaining $75 million are to be charged the traditional 2 percent management and 20 percent performance fees over the life of the fund.
South Bend, Indiana-headquartered Ceres was founded in 2007 and manages a $787 million open-ended farmland vehicle.
The firm closed the first iteration of the Sustainable Food and Agriculture Opportunity Fund on $16 million in 2016, according to Vieth. Capital from that vehicle supported investments including wastewater recycler Digested Organics, California winemaker Sugarloaf Crush and Hop Head Farms, a US Midwest hop producer.
Vieth said Ceres has worked to build its private equity strategy by drawing from existing regional contact networks built through the firm’s farmland investments. To demonstrate, Vieth described how due diligence on the Digested Organics investment included consultations with dairy farmers already in Ceres’ network.
Sub-sectors of particular interest for Sustainable Food and Agriculture Opportunity Fund II, according to Vieth, include aquaculture and indoor agriculture. Both iterations of the fund will invest in Greenleaf Holdco, a vehicle established to finance an indoor agriculture project Ceres is developing in South Bend that will allow it to supply produce for up to 55 million consumers within 300 miles.