Belgian impact investor Incofin has made an $8 million investment out of its third agri-focused fund, agRIF Fund, to purchase a stake in Indian post-harvest logistics and financing provider Sohan Lal Commodity Management, chief investment officer Geert Peetermans confirmed to Agri Investor.
The investment is part of a previously reported $20 million investment made jointly with Swiss impact investor ResponsAbility, which contributed the remaining $12 million for the secondary purchase of shares from existing investors in the company.
“Based on the experience we had with prior investments in India, [this] is a good fit with what we can do for an institution that is just setting up that business vertical,” Peetermans said, referring to Sohan Lal’s nascent lending activities. “It fits with our objective to reach the smallholder farms.”
Peetermans said that Incofin’s Chennai office had been familiar with Sohan Lal for about two years prior, but that the latter firm’s recent decision to expand financing operations made the $8 million direct investment more attractive. Incofin has a growing focus on Asia and is evolving from a rural microfinancing firm into an impact investor focused on agriculture, he added.
After raising rural-focused microfinance funds in 2007 and 2010, Peetermans said that Incofin began raising agRIF Fund in 2015 to make direct investments into agriculture, aiming to provide annual returns of between 15 and 20 percent through equity and debt investments in agriculture.
The fund has raised about $130 million thus far from European institutional investors and high net worth individuals, and Petermans expects the closed-end fund to reach a final close on $150 million by the middle of 2017.
Founded in 2008, Sohan Lal operates a network of more than 1500 warehouses and 19 cold storage facilities located throughout India in addition to a single storage facility in Myanmar. Its facilities are used by farmers of a wide variety of crops including cotton, wheat, corn, pulses and others.
The stake in Sohan Lal is the second equity investment from the fund following an investment in Crystal, a micro-finance institution supporting small-holder farmers in Georgia. Debt investments from the fund have included loans to Guatemalan coffee exporter Dinamica International Crops, Bolivian Brazil nut exporter Green Forest Products and Ecookim, a cocoa-exporting cooperative based in Ivory Coast.
Incofin has more than $850 million in assets under management and investments in 48 countries. In addition to its Belgian headquarters and office in Chennai, the firm also maintains offices in Colombia, Kenya and Cambodia.