Laguna Bay holds A$350m first close on Fund 2

Laguna Bay Fund 2 has raised all its capital to date from Washington State Investment Board and is targeting A$750m in total.

Asset manager Laguna Bay held a A$350 million ($233 million; €235 million) first close on its latest agriculture investment fund in August, after securing a cornerstone commitment from Washington State Investment Board earlier this year.

The close amount is the same figure WSIB revealed in February that it was committing to Laguna Bay Fund 2, which is targeting A$750 million and has a hard-cap of A$1 billion.

Laguna Bay confirmed the fund has now held a first close. The vehicle continues the broad diversified food and agriculture mandate of the firm’s first fund, with a focus on investments in Australia and New Zealand that offer exposure to themes including food scarcity, inflation and decarbonization.

According to a WSIB investment advisory published in February: “The fund targets high-quality upstream and midstream agriculture investments in row crops, permanent crops, livestock, water and aquaculture, predominately located in Australia.”

At a meeting on February 17, WSIB approved a recommendation by investment consultant Mercer to include a commitment to Laguna Bay Fund 2 within its tangible assets portfolio.

At the time, WSIB told Agri Investor: “The fund fits into the upstream and midstream agriculture segments of WSIB’s tangible assets framework, with the potential for exposure to downstream agriculture through vertically integrated agribusinesses.”

WSIB also made a A$250 million commitment to Laguna Bay’s first fund in 2015.

Tim McGavin, managing director and founder of Laguna Bay, told Agri Investor that the firm is aiming to reach a final close for the fund in 2023. He declined to comment on Fund 2’s investors.

On the investment thematic behind the fund’s investments, McGavin said in a statement: “The average age of farmers in the developed world is increasing. In Australia, it’s approaching 60 years and in Japan, 70 years.

“As farmers age, their innovation uptake and productivity often drops, which leads to less sustainable operating practices. Laguna Bay specializes in partnering with, financing and empowering the next generation to reaggregate, succeed and expand agricultural businesses to sustainably produce high quality, good value food – a critically important ESG initiative.”