Field Notes: PGIM’s fund reaches $1.2bn; Agri Investor Awards open to entries; London CIV launches natural capital fund

PGIM open-end fund takes $1.2bn; Agri Investor Awards 2023 open for entries; London CIV to launch natural capital fund; USDA publishes carbon market assessment report, and more. Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only.

First look

Lemon trees in an orchard

PGIM open-end fund swells to $1.2bn

PGIM Real Estate has raised almost $1.2 billion for its open-end US agriculture fund.

According to an October regulatory filing, PGIM US Agriculture Fund has raised $1.158 billion from 13 LPs since the vehicle was launched in October 2018. PGIM did not reply to messages seeking further detail.

Materials presented in early 2022 to the Teachers Retirement System of Louisiana, which committed $50 million to the vehicle, explain the PGIM US Agriculture Fund began as a $400 million separate account with an unnamed US pension plan. The pension then contributed an additional $300 million as portions of the separate account farmland portfolio were transitioned into the open-end fund in 2018.

The materials presented to TRSL said PGIM was seeking $600 million as the assets were transitioned into the open-end vehicle.

LPs in the PGIM US Agriculture Fund also include the Washington State Investment Board and the Employees’ Retirement System of State of Hawaii.

The fund’s strategy targets net returns of 7-9 percent through direct operation of up to 25 permanent planting and row crop properties. Target crops for the fund, according to materials presented to WSIB, include avocados, hazelnuts, table grapes, pecans, cherries and nectarines.

Read the full story here.

They said it

“We both agree that we must save this vital economic and environmental asset because we’ve seen the results of a decade of inaction”

Australia agriculture minister Murray Watt addresses concerns at the National Farmers’ Federation about federal plans to implement the Murray-Darling Basin Plan in full.


Agri Investor Awards 2023: Enter now!

Our global awards are now open for entries so it’s time to put your best foot forward and nominate your firm for all the great work you’ve done this year. Entries close December 31, 2023.

Now in its third year, our annual awards recognize the best deals, fundraisings, asset managers, law firms and investors across 44 categories.

From farmland, forestry and agribusiness, through to natural capital, impact and venture capital, we hope to have provided all the room you need to showcase how you stood out in 2023.

We also have a category for the Personality of the Year and Innovation of the Year for the individual and the industry innovation that deserve special recognition.

Be sure to take a look at our FAQ page for guidance on what we’re looking for in your submissions.

Send us your submissions now, and good luck!

LP watch

London CIV plans to launch natural capital fund

London CIV has appointed consultant Redington to support its launch of a natural capital investment vehicle.

The investment manager, which is responsible for 32 London local authority government pension scheme assets, has launched several public and private markets funds in the last three years aimed at addressing responsible investment, ESG and net-zero targets.

These include The London Fund, its Infrastructure Fund, Renewable Infrastructure Fund, and UK Housing Fund, all of which are private markets vehicles. Public markets funds launched to address ESG and net-zero targets include the Global Alpha Growth Paris-Aligned Fund and the Passive Equity Progressive Paris Aligned Fund.

London CIV said 30 of its corporation partner funds have declared a climate emergency since the Paris Agreement was adopted in 2015, and “many have expressed a desire for a suitable, ambitious investment vehicle that will provide more exposure to natural capital within their portfolios and help accelerate the path to net zero.”

Read the full story here.

Carbon markets

Green shoot growing from soil

USDA aiming to bring transparency to carbon markets

Landowner participation in agriculture- and forestry-derived carbon credit programs is constrained by costs related to transactions, quantification and verification, which limit returns on investment, says a USDA market assessment study.

The report was mandated by the Growing Climate Solutions Act, which was signed into law in late 2022, and is designed to help inform USDA in creating technical assistance and third-party verification programs.

With regard to carbon credit issuance, the report finds compliance markets peaked in 2018 with the creation of more than 46 million credits, which has gradually fallen to a little more than 6 million credits in 2022.

The report cites a survey of more than 800 Indiana farmers who had not implemented any form of reduced tillage, which found it would require revenues of $39.40 per acre to motivate such changes.

“Even in instances where the carbon price is close to $40, many projects may not be profitable for the producer or landowner because of high transaction costs,” says the report. “Transaction costs can include costs to measure/quantify environmental benefits, costs of annual verification and reporting, registry fees, compliance costs as well as time and opportunity costs associated with the project.”

Regarding market prices, the report says livestock- and forestry-derived carbon credits traded for between $16.57 to $19.91 on California’s cap and trade market last year, and cites a World Bank study reflecting prices of between $5 and $16 per credit derived from ag, forestry and land use on voluntary markets in 2022.

USDA can help address current concerns about inconsistencies among carbon market verifiers, says the report, by increasing transparency through technical assistance and third-party verification programs.

“The program would not create a USDA carbon registry,” says the report. “Instead, the program would enhance USDA’s efforts to provide farmers, ranchers and foresters with the necessary resources when deciding if and how to participate in a carbon market.”

USDA notes that 82 percent of all carbon market projects focus on avoiding and reducing CO2 emissions – as opposed to removing CO2 – and highlights recent pricing trends that suggest strong future demand for reforestation and soil carbon-focused protocols, which remove CO2 from the atmosphere.

Read the full report here.


PAI Partners portfolio company acquires Palace Culture

PAI Partners portfolio company The Compleat Food Group has acquired British, organic, plant-based cheese producer Palace Culture. Financial details were undisclosed.

Palace Culture produces a range of cheeses using its proprietary nut-based fermentation recipe and is the latest addition to PAI’s chilled foods platform.

Compleat was created in 2020 when PAI simultaneously acquired chilled savoury pastry producer Addo Food Group and chilled food supplier Winterbotham Darby, both of which are British companies.

The Compleat group also houses chilled food businesses Pork Farms, Wall’s Pastry, Vadasz and Wrights Food Group. A statement said the group has an annual turnover of £700 million and employs more than 3,500 people across 10 sites.

Read the full story here.

Viridios Capital and WealthCheck buy NT farm for carbon projects

Climate change investment manager Viridios Capital has teamed up with farmland investment specialist WealthCheck to acquire Conways Station in Australia’s Northern Territory for A$20 million ($13 million; €12 million).

The firms acquired the 139,200ha property with a view to developing a large-scale carbon project and running a sustainable cattle operation.

The asset borders Arnhem Land and the Kakadu National Park, with the firms saying it has “significant potential for ecosystem restoration” following a long period of cattle grazing and the impact of wild buffalo.

Viridios and WealthCheck aim to develop human-induced regeneration, and integrated farm and land management projects to generate credits, with Viridios arguing that HIR credits trade at a significant premium to what it described as “generic” Australian Carbon Credit Units. Viridios said recent changes to Australia’s carbon markets following the Chubb review had created strong demand for carbon credits generated under the HIR methodology.

Read the full story here.

AAM acquires Queensland poultry asset

AAM Investment Group has expanded its portfolio of poultry assets with the acquisition of broiler chicken business Kirchberg Poultry Farm. Financial details were undisclosed.

Capital was deployed from AAM’s flagship Diversified Agriculture Fund and the asset represents the firm’s first poultry investment in Queensland.

Kirchberg Farms has been family owned since 1995. AAM will recruit to fill two senior vacancies left by the former family owners but will retain the existing management and staff.

AAM said in June it was seeking to raise more capital for the Diversified Agriculture Fund and hoped to take the vehicle beyond A$500 million ($360 million; €337 million) in assets under management for the first time.

The vehicle was established in January 2020 with the aim of raising A$500 million within five years, a goal that looks set to be achieved in half the time.

Read the full story here.


Lawson Grains’ new leader

Lawson Grains, the major cropping enterprise owned by Alberta Investment Management Corporation and New Forests, has appointed a new CEO.

Angus Blair will take over the top job at Lawson Grains, stepping up from his previous role as general manager, commercial, where he had responsibility for operations, investment analysis, acquisitions, budgeting and management of the company’s supply chain. Blair joined Lawson Grains in 2014.

In his new role, Blair will take responsibility for driving overall strategy at the business as it continues to expand.

Lawson Grains is one of Australia’s largest privately owned cropping enterprises and was purchased by AIMCo and New Forests in 2022 from Macquarie Asset Management.

New Forests established a new farmland asset management division, New Agriculture, later that year to manage Lawson Grains – which comprises 120,000ha of land across 11 aggregations in New South Wales and Western Australia – and build out a larger portfolio of farmland assets.

VC fundraising

FarmInsect, a German insect protein value chain company, has raised an €8 million Series A funding round led by Sandwater, with participation from Bayern Kapital, Minderoo Foundation and the EIC Fund.

Overstory, a Dutch climate tech start-up, has raised $14 million in a Series A funding round led by B Capital, with participation from The Nature Conservancy, among others.

GoodBytz, a German robotics start-up, has raised €12 million in a Series A funding round led by Oyster Bay.

Amatera, a French start-up seeking to accelerate development of climate-resilient perennial crops, has raised €1.6 million in a pre-seed funding round backed by PINC, Exceptional Ventures, Mudcake and Joyance Partners, among others.

Also in the news…

China to review Australian wine tariffs as relations thaw
Exports of Australian wine to China fell to A$8.1m in 2023 from $1.1bn three years earlier, as tariffs effectively removed the country as a trading partner (Agri Investor).

The return of the rice crisis
Export restrictions and extreme weather are threatening the global supply of a staple commodity relied on by millions (FT).

Farmland investment: Stick or twist?
Levelling out farmland prices, higher interest rates and widespread drought present prospective buyers with plenty to consider (Agri Investor).

Venture Capital Q3 Fundraising Report – the drought continues
Venture funds worldwide raised a combined $76.3bn in the first nine months of this year, down 45% from the same period last year (VCJ).

UK meat consumption at lowest level since records began
The average person ate 854g of meat a week at home in 2022, a 14% decline since 2012, driven by the cost of living crisis and lifestyle changes (Guardian).

Today’s letter was prepared by Binyamin Ali, Chris Janiec and Daniel Kemp