First look
Apple puts $200m into natural capital
Climate Asset Management – the JV between HSBC and Pollination – has landed a $200 million commitment from Apple to make investments alongside the firm’s existing strategies.
The tech giant has doubled the size of its Restore Fund, to which it committed $200 million in 2021. The fund started out as a vehicle managed by Goldman Sachs, with participation from Conservation International.
CAM’s mandate: Apple views the $200 million investment now being made through CAM as an expansion of the Restore Fund, although the fresh capital will be held in a separate fund managed by CAM and features no involvement from Goldman Sachs or Conservation International.
Investment approach: Investments will straddle CAM’s natural capital strategy which invests in natural assets such as farmland and timberland in developed markets and delivers financial and environmental returns. Its carbon strategy, meanwhile, delivers yield exclusively in the form of carbon credits and invests in emerging markets to finance the development or restoration of natural assets.
CAM raised $650 million across its two strategies in December 2022. The firm delivered the first tranche of a $150 million financing package it pledged to the Restore Africa program in May.
They said it
“We as a nation have decided we want to expand solar, and bureaucrats rule the world. It takes forever, so there’s this endless process that needs multiple years sometimes to get that approval.”
Farmland Partners chairman Paul Pittman bemoans the time taken to secure approval for solar projects in the US.
Water
Australia court appeal
Harvest Road, the cattle company owned and operated by Tattarang, the private investment vehicle owned by Australian billionaire Andrew Forrest, has lost a court appeal to draw water from a river considered sacred by Aboriginal people.
According to a report in the Australian Financial Review, Harvest Road sought to use water from the Ashburton River, also known as Mindurru, to irrigate a pastoral property it owns. But native title holders Buurabalyji Thalanyji Aboriginal Corporation opposed this on cultural grounds.
Indigenous rights: The traditional owners’ group said “the Thalanyji people have been custodians of the river for over 60,000 years and damage to the river rightfully should not be allowed for the sole benefit of a local pastoralist.”
Long-running battle: The court decision comes four years after Harvest Road (and companies related to it) first sought permission to build weirs on the river. The organization found some success in building a trial weir in collaboration with TahalnyjI Elders but came up against opposition when it sought to expand its plans.
A spokesman for Harvest Road told the AFR the firm was considering its options and remained willing to engage with the local indigenous community.
Fund watch
Midwest Fund III takes $170 million
Midwest Growth Partners closed its Fund III on $170 million. The Iowa-based firm operates in the lower mid-market and partners with businesses seeking succession planning liquidity or growth equity.
Biggest in the series: The vehicle is the largest MGP has raised to date. The firm was founded in 2014 and closed its first fund on $41.1 million that year. It closed its Fund II on $113 million in 2019.
Portfolio assembly: Fund III will make 10-15 investments worth between $500,000 and $20 million. It will target US food and agriculture, manufacturing and distribution businesses, often in rural and underserved areas.
Melitas Ventures seeks $120m for Fund III
Melitas Ventures, a New York-based firm the invests in early stage food and beverage companies through the entire value chain is raising up to $120 million for its third fund, according to an SEC filing.
The firm’s existing portfolio includes businesses such as Bellway, a natural fiber supplements producer to aid digestion; Abbot’s Butcher, a plant-based meat alternatives products producer and Lemon Perfect, which is a “better-for-you” lemonade business that uses no sugar and has five calories, among several other companies.
Regulation
French think-tank: Policy has slowed down farmland investments
The introduction of new regulations in key agricultural investment markets, such as New Zealand, is among the factors that have slowed global land-based investment since 2015, says a report from the internal think-tank of the French Ministry of Agriculture.
Assessing the field: The Centre for Studies and Strategic Foresight examined the “takeover of agricultural land by financial players” through case studies of Canada, New Zealand, Mozambique and Uruguay. CEP examined motivations and strategies in the market, which it assessed as having five key investment groups: institutional investors, agribusinesses, rural families, individuals and Chinese firms.
Social issues question “economic relevance”: Analysts wrote that investors’ believe long-term population growth and supply-side tension drivers including climate change make agricultural land a secure asset. However, the land market’s complex local impacts – such as whether profitable value-add activity is occurring and how much of a farms profits stay within the home economy – have attracted policymaker attention and been among the factors slowing the markets’ growth.
The report predicts climate change and strong tensions around raw materials (which have been heightened since the pandemic) will be the most important factors driving what it sees as “reconfiguration of the phenomenon,” which is already underway.
“While the influx of financial capital makes it possible to support the agricultural development of the territories concerned, the economic performance of the resulting production structures raises questions and its social limits appear: sometimes less equitable distribution of added value, limited support for local development, ambivalent effects on employment.”
Agtech fundraising
- Carbon Robotics, a Seattle-based AI-powered robotics company that pinpoints and removes weeds using lasers, raised $30 million in Series C funding round led by Sozo Ventures with participation from existing investors Anthos Capital, Fuse Venture Capital, Ignition Partners, Liquid2 and Voyager Capital.
- JackBe, a curbside drive-thru grocer based in Oklahoma City, raised $11.5 million in funding. Backers included individual investors and strategic partners such as GP Investments.
- Olyra Foods, a Greek organic biscuit maker, raised $4 million in Series A funding round led by the VC arm of Mexican food group Grupo Bimbo, which now owns roughly 30 percent of the business.
- Wilk, an Israeli developer of cultured milk, raised $3.5 million led by Danone Manifesto Ventures, the venture arm of the French food giant.
- Solasta Bio, a British start-up established to produce natural insecticides, raised £4 million ($5 million; €4.5 million) in pre-Series A funding round led by Yield Lab Europe. Other investors included Rubio Impact Ventures, Scottish Enterprise, Cavallo Ventures, SIS Ventures, and UKI2S.
Also in the news…
- Watershed to acquire emissions accounting and data firm VitalMetrics
Watershed is a startup that helps companies analyze and cut their greenhouse gases (Axios). - Wall Street is turning water into wealth, leaving Californians out to dry
Banks, pension funds and insurers have been turning California’s scarce water into enormous profits, leaving people with less to drink (Bloomberg). - The illusion of a trillion trees
Governments alone have promised to plant 633 million hectares of trees to help save the planet. The goal is laudable. But is it remotely plausible? (Financial Times). - Collab between ag-focused SWFs gather steam
Canada and the United Arab Emirates have created a body to foster collaboration among their respective investment vehicles. The Canada-UAE Sovereign Wealth Fund Council will look to create a framework for “investment collaboration” on sustainable economic development. (Zawya)
Today’s letter was prepared by Binyamin Ali, Chris Janiec and Daniel Kemp.
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