Incofin adjusts agRIF Fund return target amid $76m fundraise

Chief investment officer Geert Peetermans says the change reflects a natural evolution towards investor-favorable structures within the rapidly developing impact investing market.

Incofin Investment Management has lowered the return target for its agriculture-focused agRIF Fund, which secured an additional $76 million at the end of January.

Chief investment officer Geert Peetermans told Agri Investor Incofin is now targeting annual returns of between 12 and 15 percent for agRIF, which are below the 15-20 percent range he identified for the same vehicle in March 2017.

“I think that is realistic based on experience and what we are seeing,” said Peetermans. “The general appetite for impact investing has grown. This obviously leads to a development where the structuring becomes more favorable for investors – better liquidity options. We then get a better risk/return balance, because you have better liquidity options available.”

Peetermans explained that when combined with the changes the fund’s liquidity derived from sale and purchase of various share classes and securities related to agRIF, the latest fundraising brings its current capital to about $150 million. agRIF is open to institutional investors committing a minimum of $500,000.

The recent fundraise saw Incofin, an emerging markets focused impact fund manager headquartered in Belgium, secure commitments from existing investors that included Belgian bank vdk and Dutch railway pension SPF. Those LPs were joined by BNP Paribas, which made an $11 million commitment, and the Development Bank of Austria, which invested $15 million, among others.

The capital added in the latest round, he said, is to be deployed and returned to investors no later than 2025.

agRIF was launched in 2015 and followed two iterations of a Rural Impulse Fund vehicle managed by Incofin. It pursues debt investments in agricultural SMEs and agriculture-focused intermediaries in order to promote smallholders’ access to financing.

The fund is currently about 80 percent deployed, according to Peetermans, who said agRIF’s capital has been used to support cocoa and cashew nut producers in Africa and Central America’s export-oriented coffee sector, among other investments.

Incofin drew from agRIF in March 2017 when the firm made an $8 million investment into Sohan Lal Commodity Management, a provider of post-harvest logistics and financing headquartered in New Delhi, India.

Peetermans said such exposure to agriculture has also played a role in fundraising for the firm’s other investment vehicles, including funds targeting institutions and others seeking capital from individual investors.

“The agricultural component provides a very attractive narrative,” he said. “When we first engage with new investors, this [agriculture] often calls their attention.”

In addition to agRIF, Peetermans explained, Incofin has also seen strong demand among qualified individual investors committing a minimum of $125,000 to its ag-focused Fair Trade Access Fund.

Agriculture is also one of two focus areas for an India-focused equity vehicle Incofin is currently raising, he added. That fund is targeting $100 million and expects a first close on $50 million by the end of the second quarter, after securing an “anchor commitment” from an unidentified family office, Peetermans said.