Field Notes: LACERA sets aside $450m for ag and mining through 2026; Centuria acquires horticulture facility; UK supports farmer access to nature markets

LACERA sets aside $450 million for ag and mining through 2026; Centuria’s unlisted farmland fund acquires horticulture facility; and Forward Consumer Partners closes $425 million Fund I. Plus: UK develops toolkit to support farmer access to nature markets; and hires at Paine Schwartz and Flagship Pioneering. Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only.

First look

Fields of crops

LACERA targets $450m to ag and mining by 2026

The Los Angeles County Employees Retirement Association has approved its investment team’s proposal for its 2024 agriculture pacing plan.

LACERA will invest $150 million into agriculture and mining from its natural resources investment bucket, and is seeking a 15 percent return from mining and a 6 percent return from agriculture.

Energy also forms a large part of the bucket and the pension has targeted investments of $500 million into the asset class this year.

LACERA’s pacing plan targets a 3 percent allocation to private natural resources in the next three to five years, with investments in mining and agriculture projected to increase to $300 million per annum in 2027 (see chart below).

The pension’s January 10 meeting documents show it will make fund investments ranging from $10 million to $100 million.

In 2022, LACERA confirmed the acquisition of stakes in two farmland funds now managed by Nuveen, through two separate secondaries deals worth $456 million.

The transactions were made up of a $191 million secondary purchase in TIAA-CREFF Global Agriculture and a $265 million secondary purchase in TIAA-CREFF Global Agriculture II.

The pension added to this in 2023 with an $85 million secondaries deal for an additional stake in TIAA-CREFF Fund I, and another $46.4 million secondary deal in TIAA-CREFF Fund II.

Pushpam Jain, an investment officer for LACERA’s real assets program, told Agri Investor last year that the pension had been looking for a way to make its first farmland investments since at least 2018, when the secondaries opportunities with Nuveen became available.

“Secondaries don’t really happen in this space as much, so we had to take advantage of the timing and [the fact] it was available to us,” said Jain.

“We can give $100 million to Fund A, B or C. We don’t really know what they will do with it, in the end. We don’t know which exact farms they will buy. The major attractive feature of this secondaries is that everything is bought and developed.”

They said it

“In the Midwest, people have been on that [regenerative farming] road for a long time already and they have been getting the results out of it. In the Southeast, it’s way behind”

Peoples Company land manager Thiago Lima says part of his new role will involve finding assets in the US Southeast that can be converted to regenerative farming

Fund watch

Forward Consumer Partners bags $425m Fund I

Forward Consumer Partners closed its debut Forward Fund I on its $425 million hard-cap, exceeding its $350 million target.

The vehicle was launched in June 2023 and closed oversubscribed six months later in December last year.

Connecticut-based FCP was founded in 2023 by managing partner Matt Leeds, who left his role as partner at L Catterton in 2022. The private equity firm’s team is comprised of executives who have previously held positions at KKR, Goldman Sachs, Endeavor and McKinsey, among others.

Forward Fund I will make majority equity investments of $25 million to $100 million in lower mid-market consumer brands and will seek to acquire five to seven assets. The vehicle has a 20 percent net IRR target.

Food and beverage is one of the firm’s core focus areas and will also pursue investments in other “habit-driven categories” such as personal care, consumer health, pet care, beverage alcohol and home care.

The strategy is also able to execute larger transactions through its “substantial co-invest network,” said a statement from the firm. FCP also operates Fast Forward, which is a strategy that incubates consumer brands from inception.

“Consumer spending provides a long-term stable backdrop, with a 6 percent CAGR for more than 50 years,” a source familiar with the strategy told Agri Investor.

“Within this sector, there is clear whitespace for control-style investing within enduring but smaller-scale brands. The leaders in consumer investing have scaled up, leaving a clear opportunity for a branded consumer focus within this market.”

Read the full story here.

Deals

PAG agrees deal to acquire Food Union Europe

PAG Private Equity has struck a deal to acquire a controlling interest in ice cream and other frozen foods provider Food Union Europe. Financial details were undisclosed.

The Hong Kong-based firm has been invested in the business since 2017 and purchased its latest set of shares from a founding partner and private stakeholders.

“We believe strongly in the company’s unrivalled market position across its core markets in Latvia, Estonia, Lithuania, Denmark, Norway and Romania,” said Lincoln Pan, partner and co-head of private equity at PAG. “We look forward to working with the existing management to support Food Union’s continued growth and expansion.”

The deal is expected to reach financial close in Q1 2024, at which point PAG will take control of Food Union Europe’s dairy and ice cream production facilities and direct-to-consumer distribution assets across the continent.

Food Union Europe’s brands include Latvian dairy company Dzintars, Estonian ice cream producer Eriti Rammus and Lithuanian ice lolly company Jocker, among others.

Other food businesses within PAG’s portfolio include Patties, an Australian provider of savoury snacks, appetisers, ready meals and dessert. The firm is also invested in frozen foods business Vesco, fast food business Craveable Brands, and poultry businesses The Cordina Group and Shandong Fengxiang.

Read the full story here.

Centuria Agriculture Fund acquires horticulture facility

ASX-listed real estate investment manager Centuria Capital Group has acquired a A$21.5 million ($14.4 million; €13.2 million) protected cropping facility in South Australia, boosting its unlisted Centuria Agriculture Fund to A$351 million in assets under management.

The facility’s vendor, hydroponic vegetable producer P’Petual Holdings, will continue to operate it with the backing of Centuria.

Centuria head of agriculture Andrew Tout told Agri Investor the open-end CAF had no set fundraising target, but that the firm expects it to grow to more than A$1 billion.

“We’ve got no set timeframes; we’ll do it as the right opportunities present themselves, and we’ll get there by making more acquisitions like this where we’ve got high-quality properties with a big focus on having the right operators investing in the right industries,” he told Agri Investor.

This fourth acquisition for CAF – which launched at the start of the 2023 financial year – is made up of 6ha of greenhouses and 6ha of double-skinned plastic glasshouses within a 59ha property in the Adelaide Plains region, 38km north of Adelaide.

The facilities could produce 1,488 tonnes of tomatoes, 136 tonnes of cucumbers, 517 tonnes of eggplants and 43 tonnes of capsicums each year.

Tout said CAF aims to find “best-in-class facilities” that are unaffected by negative weather events and can produce all year round.

“Your typical outdoor production system is exposed to the elements and it’s also very seasonal, so your production periods are very limited.

“The main attraction to these [CAF] assets is continuity of supply and the ability for producers to produce a high-quality product with much lower inputs, therefore the efficiencies of these are significant.”

Read the full story here.

Platinum Equity takes two bites of dairy

Platinum Equity has struck an agreement with Danone to acquire the French food giant’s Horizon Organic and Wallaby. Financial details were undisclosed.

Horizon Organic is one of the largest USDA-certified organic dairy brands and has a portfolio of dairy products that includes milk, creamers and whiteners, yogurt, cheese and butter.

Wallaby is an Australian organic natural yoghurt brand that also produces no-sugar flavoured yoghurt products.

Platinum Equity’s current portfolio includes Biscuit International, a European manufacturer of private-label sweet biscuits; wine producer Fantini Group; and seafood provider Iberconsa.

“Premium offerings, including organic and value-added products, are driving the growth in the dairy milk category,” said Platinum Equity managing director Adam Cooper in a statement. “Horizon Organic is a pioneer of that segment and is in position to continue capitalizing on and accelerating the trend.

“We are excited about Horizon Organic’s potential as an independent business with a renewed sense of focus and a commitment to investing in its success. We have a lot of experience supporting food and beverage businesses. We look forward to partnering with Horizon Organic’s management team to ensure a seamless transition and chart a path for continued growth and expansion.”

Previous Platinum Equity investments include JM Swank, a food ingredients distributor acquired from ConAgra; and Harvest Meat Company, a US distributor of packaged meat and bakery products.

Farmland

UK launches toolkit to help farmers access nature markets

A toolkit aimed at British farmers and commissioned by the Department for Environment, Food and Rural Affairs has been launched to help land managers access nature markets.

Published by the Green Finance Institute, the Farming Toolkit for Assessing Opportunities in Nature Markets is intended to support farmers’ understanding of carbon credits, biodiversity net gain and nutrient neutrality, all of which have the potential to create new revenue streams for farmers.

Biodiversity net gain regulations stipulate that all new significant developments must deliver a 10 percent biodiversity net gain, while nutrient neutrality seeks to ensure new building projects do not add more nutrient pollution to the water catchment in a given area.

The Farming Toolkit is also intended to support farmers eligibility for the Natural Environment Investment Readiness Fund, which offers grants of up to £100,000 for projects aimed at giving farmers access to nature markets.

The third round of the NEIRF is currently open to applications and closes at noon on February 16.

People

Flagship Pioneering and Indigo Ag get new CEO

Life science-focused venture capital firm Flagship Pioneering has appointed Dean Banks as chief executive and partner, effective February 2024.

Banks will also assume the role of CEO at Flagship Pioneering portfolio company Indigo Ag, which is one of the biggest soil carbon development and marketing companies. He will continue as an Indigo board member, a role he has held since July 2022.

Banks is the former president and CEO of Tyson Foods. He has held numerous leadership and entrepreneurial roles across the food, agriculture, technology and life sciences industries.

Paine Schwartz brings in Helis Zulijani-Boye

Paine Schwartz Partners has hired Helis Zulijani-Boye as a managing director on its investment team.

She joins from Newlight Partners, which is a spin-out from Soros Fund Management, where she was focused on mid-market private and growth equity investing globally.

“Helis has significant experience sourcing, executing and actively managing investments, and we are pleased to welcome her to Paine Schwartz,” said chief executive Kevin Schwartz in a statement. “Helis’s addition marks another important step in our efforts to bring top talent to our investment team.”

VC fundraising

Oakberry, a Brazilian açaí bowls and smoothies start-up, raised $67 million in a Series C funding round through funds managed by BTG Pactual.

FA Bio, a British biotechnology company developing ways to protect natural ecosystems by identifying microbial bio-products, raised £5.3 million in a funding round led by Clean Growth Fund and Pymwymic with participation from Ship2B Ventures.

Enifer, a Finnish biotechnology company, received a €12 million grant from Business Finland to build its first commercial scale mycoprotein ingredients factory.

Nasekomo, a Bulgarian biotechnology start-up, raised €8 million in a Series A funding round led by Invenio Partners, with participation from a host of individual investors.

GeoSalmo, an Icelandic aquaculture start-up, secured a €13.4 million funding round to construct a hybrid flow-through salmon farm, which is a land-based fish rearing facility.

Also in the news…

RIP Foods closes its doors after four years

The B2B plant-based meat start-up for foodservice announces its closure after it failed to secure further funding (Vegconomist).

Loam Bio makes its entry into the US market

Australian carbon farming biotechnology start-up wants to capitalize on the limited farmer engagement in nature markets (Business Wire).

Perfect Day founders step away as company finalizes $90m pre-series E

Backers of the animal-free dairy company include Temasek, CPP Investments and Horizons Ventures (AgFunder).

How to scrutinise carbon offset funds

Additionality, permanence and co-benefits are the things to consider when evaluating a carbon offsets fund, according to a Bfinance white paper (NPM).

Investors split over future direction of biodiversity standards

Several investors have called for biodiversity standards to ‘go further’ than the TNFD, while others think the current market framework is robust enough (Responsible Investor).


Today’s letter was prepared by Binyamin Ali, Chris JaniecDaniel Kemp  and Tom Taylor