Paine Schwartz Partners is currently raising the fifth fund from its Food Chain series with a target of $1.2 billion, according to a source familiar with the vehicle.
The fund has a strategy focused on making control investments across the food and agribusiness value chain, the source said, adding that seeds, high-value specialty crops, value-add processing and ag-focused contract research were among the sectors covered by its mandate. It is understood Food Chain V will seek to make about 15 investments.
The fund will also look to make non-control investments in technology-oriented businesses engaged in biosciences, biotechnology and seed technology, the source added.
The source also highlighted that, historically, Paine Schwartz has offered LPs co-investment opportunities ranging from $10 million to $80 million. The firm declined to comment.
Sizeable check
Last week, Minnesota State Board of Investment’s investment advisory board recommended a commitment of up to $150 million to Paine Schwartz Food Chain V, according to the institution’s website.
The pledge is subject to approval by the Minnesota SBI investment board, which is scheduled to meet next on June 14. Minnesota SBI declined to comment further.
The $93.4 billion pension was also an investor in the predecessor fund, Paine Schwartz Food Chain IV, which closed on $893 million in late 2015 after surpassing an initial target of $800 million. It also backed Fox Paine Capital Fund II, raised before the firm’s rebranding to Paine Schwartz Partners.
Credit Suisse is acting as placement agent for Paine Schwartz Food Chain V, according to the source, who described Paine’s management team as “talented.”
“I think they have a really good niche,” said the source. “If we had the added capacity right now, I think we would cut them a check.”
Earlier-stage deals
It is not clear if technology investments potentially pursued from Fund V are distinct from those planned for the $300 million-$400 million Growth Equity Fund that Agri Investor reported Paine Schwartz to be raising in July. It is understood the vehicle will allow the firm to target earlier-stage opportunities across the food and agribusiness value chain.
On Tuesday, the source said that two of the executives that Paine Schwartz affiliated with the Growth Equity Fund in a presentation delivered at the Agri Investor Forum in Australia last year – ex-director of natural resource investments at UTIMCO Spencer Swayze and Stephen Padgette, formerly vice-president of R&D investment strategy at Monsanto – were not listed in materials for Fund V.
“They have an increasing interest in all things agtech, in earlier-stage deals that would border more on venture capital than their traditional private-equity, buy-out type deals,” another source familiar with Paine Schwartz told Agri Investor last month. “That is not limited to the US, but I think that is certainly a key focus area for them.”
Last month, Paine Schwartz hired former Monsanto executive Rick Greubel to serve as operating director. Greubel joined the firm after a three-year stint as chief executive with Kaiima Bio-Agritech, an Israeli company focused on improving plant productivity by inducing novel diversity within genomes using plants’ own DNA.
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