Matt Jansen has chased the leading edge of growth in the global food and ag supply chain over a 30-year career.
It began with a management training program at Archer Daniels Midland just after graduation from the University of Arkansas in 1989, and went on to include experience in the buildout of Brazilian soybean production, European processing infrastructure and the ethanol-fed US ag boom.
After subsequent stints helping China and Saudi-linked investment vehicles establish beachheads in agriculture, the latest chapter in Jansen’s career began in March, when he joined StepStone Group as senior managing director.
A recurring theme throughout the past five years of his time in the space has been the role played by state-led agricultural ambitions. In the case of his recent stint in Saudi Arabia, changing strategies and geopolitical tensions caused him to rethink his future in the region.
As he begins to engage markets from the perspective of institutional investors through his role at StepStone, Jansen is clear-eyed about the challenging backdrop to an agricultural market that is dependent on well-functioning international trade.
“If you think back four or five years ago, the idea – especially in the ag and food space – was that globalization was a good thing. The willingness of countries or companies to rely on other countries outside of their borders for different components and different inputs; that all was reasonable and good, it was low cost and high-quality,” he said.
“In today’s day and age, it’s developed into more of a ‘Me’ environment. It’s more of a nationalism approach rather than a globalism approach. That can get complicated.”
Jansen’s early years with ADM included time in Europe, where he managed what was then the world’s largest soybean processing facility and the complicated supply chain it relied on. A seven-year stint in Brazil in the early 2000s followed, where he learned Portuguese, established local relationships and helped ramp up soybean production.
After returning to the US for positions leading ADM’s grain and ethanol divisions, Jansen assumed leadership of the company’s global oilseeds business, its largest unit. He describes that position as his first “platform-type” role, which included strategic oversight of ADM’s worldwide oilseed refining and biodiesel production as well as its cocoa, fertilizer and other specialty businesses.
The position, Jansen said, offered him a wholistic view of the global ag sector. COFCO International became relevant to that view in 2014.
In the fall of that year, COFCO International announced near-simultaneous investments into Dutch agribusinesses Nidera and Noble Agri, the agriculture arm of Hong Kong-headquartered commodity trading firm Noble Group.
COFCO International had only just been established earlier that year as a joint venture between COFCO, China’s largest food company; the $63 billion Chinese sovereign wealth fund China Investment Corporation; the S$313 billion ($233.6 billion; €195.6 billion) Singaporean sovereign wealth fund Temasek; World Bank-affiliated International Finance Corporation; and smaller Chinese co-investors.
Not long after, Jansen was offered the Switzerland-based role as chief executive of COFCO International. He was charged with building on the initial steps the venture had taken towards achieving its goal of international expansion.
“Considering that China is obviously the huge demand base, you put those three groups together [COFCO, CIC, Temasek] and you almost have unlimited resources and a real commitment to the business. For me, that was quite exciting and compelling,” he said.
Jansen joined COFCO in 2015 to focus on international acquisitions, but quickly found that managing existing assets while integrating the Nidera and Noble joint ventures was taking most of his time. This dynamic only increased as COFCO executives came to appreciate the operational complexity of their assets.
“The conversation kept reverting back to what they had, versus what they wanted – which is somewhat understandable, considering the circumstances,” Jansen said. “Once the appetite for growth dried up, my job was just to problem solve.”
The fact COFCO has carried out few international acquisitions in the years since 2017 when he moved on, demonstrates he was correct in thinking conditions at the company were unlikely to change, he said.
A Saudi adventure
Jansen had already been approached more than once by the Saudi Agricultural and Livestock Investment Company – a food-focused subsidiary of Saudi Arabia’s $300 billion Public Investment Fund – by the time of his decision to leave COFCO.
The position they were looking to fill had a mandate not unlike his role at COFCO; pursuing international investments to help ensure food security, in this case for a country importing as much as 90 percent of its supply.
“What the Saudis have is arid land and oil and what they don’t have water and domestically produced food,” he summarized. “It’s really just that simple.”
Jansen planned to establish relationships within Saudi Arabia for a few years before eventually relocating with a small team to a more international location. Having never spent time in the Middle East, he said, he viewed taking the Riyadh-based job in April 2018 as an adventure.
In international markets broadly welcoming of Saudi investment, Jansen said he was able to rapidly complete acquisitions that included a wheat and sheep business in Australia and a farming operation in Ukraine. During his year and seven months with the company, Jansen also worked on an existing port construction joint venture in Vancouver, increased SALIC’s Brazilian beef investments and continued its early steps into agtech.
“From the fall of 2018, you had the Western world back out,” said Jansen. “Prior to that, the winds were tailwinds, pretty much, in the way the world was viewing the Middle East and Saudi Arabia in particular. The rest of the world really took a step back.”
Among those stepping back were the many prominent financial executives who cancelled plans to attend that year’s Davos in the Desert conference.
Although he and his team were not directly impacted by the situation, Jansen said he decided it did not make sense for him to continue executing a strategy he was unlikely to oversee over the long term. He left SALIC in October 2019.
Hard to pin down
Now at StepStone, Jansen’s role focuses on advising pension plans, endowments, sovereign wealth funds and others on how to build and manage agricultural exposure. Their strategies are formulated independently of what strategic players such as COFCO and SALIC are doing, said Jansen, but the slate of global opportunities available to investors is to some degree shaped by their actions.
Though financial returns are obviously an important factor for strategic players, he said, other opaque considerations clearly play a role in some deal selection.
“There is a return threshold that a SOE [state-owned enterprise] may have that they’d rather do something for strategic purposes more so than what a pension fund is going to do,” he said. “That is one of the differences that is real. It’s hard to pin down, because it’s not really described or declared, but it’s real.”
In the months since the onset of covid-19, that strategic current has driven many countries to sharpen their focus on the benefits of self-reliance in national food supply. Such pursuits come at a price, said Jansen. While general sentiment is unlikely to revert back from nationalism any time soon, he added, globalization will prove the more viable approach over the long term.
“We are going to get more aligned in that regard rather than creating these parallel systems or closed-loop systems,” he said. “I’m not saying that can’t happen, but I think when cooler heads prevail, you can come back to the willingness to sit down at a trade table to hash out some of these differences,” Jansen said.
The events that shortened Jansen’s tenures at COFCO and SALIC reflect forces that are not confined to agriculture. Those forces shape ag’s markets in distinct ways, nonetheless.
Coming decades may well see agriculture emerge as the pivotal indicator as to whether covid-19 truly cemented a shift from just-in-time to just-in-case thinking in global supply chains.
Savvy GPs have already benefited from the diffusion of capital and focus that followed the pull-back of certain state-led ambitions within the sector. It is instructive that Jansen’s own path along global ag’s front lines of development has now brought him into a position that itself reflects the growing role of institutional investors across markets.