Colombian cocoa fund holds first close – exclusive

Colombian cocoa private equity fund Serfinco Agronegocios has held a first close on $10 million. The 20-year fund is targeting $30 million overall and hopes to close by the end of the year.

The fund received commitments from local high net worth investors and is targeting domestic investors only at this stage.

The asset manager is Agrofuturo, which has more eight years of experience managing $20 million worth of cocoa, pineapple and forestry assets, according to Camilo Perez, manager at Agrofuturo.

While the fund has focused primarily on retail investors until now, Perez is hopeful that the $200 billion local pension fund market will soon have appetite to invest in the agri sector. “We are just waiting for the right moment to raise money from them,” he told Agri Investor.

The fund is targeting 3,500 hectares of farmland and will soon close on the acquisition of most of that land. The remaining $20 million will be used to develop the land assets. The fund has a four-year investment period.

The agriculture sector in Colombia is very underdeveloped due to the country’s history of violence but this means there is a lot of opportunity to make developmental returns, according to Perez. There are also some restrictions on buying large tracts of land and some areas are still too dangerous to operate in, but this is where Agrofuturo’s experience and risk mitigation processes come into effect, said Perez.

Other agri investment projects in Colombia include Star Crop’s recently-launched $50 million cropping project.

There is a 1 percent administration fee, a 2.5 percent management fee and a 25 percent performance fee over consumer price index plus 8 percent. The fund will start paying dividends after reaching positive cashflows which it predicts will take place in year five.