H1 fundraising stats show depth of market’s trough

It has arrived – Agri Investor’s inaugural fundraising report was published Monday and the natural assets fundraising landscape just got a whole lot clearer.

The headline figure is a tough one to swallow: H1 2023 fundraising for agrifood and forestry funds dropped to $1.4bn, which is the lowest half-year figure since H1 2011. To put that further into context, the H1 fundraising figure for 2022 was $2.5 billion, while the half-year figure for 2021 was $4.4 billion. The post-pandemic boom and bust narrative that has played out across financial markets is plain to see in natural assets fundraising as well.

The data presented in the report counts the final closes of all closed-end, unlisted funds and vehicles dedicated to agrifood and forestry. The numbers also take into account separate accounts and co-investment funds.

We have excluded vehicles that invest into agrifood and forestry assets opportunistically, which is why the numbers presented are lower than those available on our full online database. Also excluded in this first report are climate vehicles, such as the TPG Rise Climate Fund that closed on $7.2 billion in 2022.

The main reason for this is the impact such a large vehicle has in distorting the fundraising numbers relative to dedicated agrifood and forestry funds – full-year fundraising for such core vehicles in 2022 was only $4.4 billion by comparison, so the distortion that would be created by including such a mega climate fund is plain to see.

We do, however, intend to create space for such climate vehicles in subsequent instalments of the report as many are raised – including TPG’s $7.2 billion fund – with a mandate to invest in sustainable agri or forestry assets, which is of course one of the trends that has led to increased interest and investment in the natural asset world.

Back to the H1 fundraising figures themselves, and it’s not all gloomy.

Despite the low fundraising total for H1 2023, an average vehicle size of $220 million represents an increase on the H1 2022 average of $161 million. The full-year average vehicle size in 2022 was $162 million, while the full-year average figure for 2021 stood at $181 million and was $165 million in 2020.

Overall fundraising figures for 2023 – particularly those for the average vehicle size – could be positively impacted – and quite dramatically, too – by decisions at Paine Schwartz Partners.

The firm’s 2022-vintage Food Chain VI vehicle has already taken $1.6 billion in commitments against a $1.5 billion fundraising target. If the firm chooses to close the fund before year-end, it would single-handedly more than double the H1 take ($1.4 billion) and result in a big upswing in the average vehicle size figure as well.

We look forward to bringing you more fundraising analysis in the months ahead and invite you all to share your feedback and point out any closed or live private market vehicles we may have missed.