Hosen Capital to launch $700m agribusiness fund

The private equity investment manager aims to capitalize on demand for higher-value food in China and other emerging economies.

Hosen Capital is planning to launch a new fund targeting food and agribusiness companies in 2019, Agri Investor has learned.

The Beijing-based private equity investment manager, which focuses on food and agribusiness companies, will launch the fund in the second or third quarter of the year, said a source familiar with the matter. The firm is expected to raise funds of between $600 million-$700 million.

The vehicle follows Hosen Capital’s Investment Fund III, which reached around $440 million, overshooting a $400 million target, when it closed two years ago, the source added.

Investment from Fund III include the Australian beef processor Kilcoy, which processes over 260,000 grain-fed cattle per year and exports premium beef to more than 20 countries, including China, he added. Other portfolio companies include China’s largest wholesale market of agricultural products Xinfadi; dairy producer Kedi Dairy; Asia’s largest tuna fishing company Tuna Fishing; and Ruprecht Company, a US protein processor company.

Limited partners in the fund include New Hope Group, Asia Alternatives, Pavilion Capital and the World Bank’s International Finance Corporation. Existing LPs include Temasek and Mitsui.

Hosen Capital, which was founded in 2010, will continue its strategy of consumer-focused investments in food and agri-business-related companies that are either located in China or involved in meeting demand in the Chinese market.

The firm will start raising capital for the new vehicle once 75-80 percent of Fund III has been deployed, the source said. The fund aims to capitalize on growing demand in China and other emerging economies for higher-value food and organic produce.

Hosen Capital is sponsored by New Hope Group, which operates agribusinesses in China and abroad. The group is a feed producer and one of the largest suppliers of meat, egg and dairy products in China. Hosen Capital, which has raised three funds prior to Hosen Investment Fund III, has $2.31 billion in assets under management and offices in Chengdu, Shanghai and Guangzhou. It is led by former New Hope Group team members Chris Wang and Alex Zhang.