Manna Tree Partners surpassed a target of $100 million to close its debut fund on $141.5 million, drawing on a global investor base made up largely of high-net-worth individuals and family offices.
Co-founder and chief investment officer Ross Iverson told Agri Investor that after being established in 2018 by a group that included Gabrielle ‘Ellie’ Rubenstein, Manna Tree initially planned to raise $50 million for the vehicle.
This was to be deployed within 12 months as part of an effort to establish itself with investors. However, after reaching that milestone within four months, Iverson said, the firm decided to double the target for Manna Tree Partners Fund I, which it ultimately exceeded.
“We had a pretty robust pipeline of investors at the end of the year and the public markets were up so much that there was, from my point of view, a lot of people reallocating larger dollars into private equity vehicles,” said Iverson. “I think we benefited and received a lot of those reallocations by being an interesting first fund that people had been tracking during 2019.”
While Vail, Colorado-headquartered Manna Tree did not raise capital in Asia, the firm encountered relatively balanced demand across the Middle East, Western Europe, Mexico, Canada and the US, Iverson said. The fund eventually attracted 131 LPs across 18 countries.
Investors included a US-based endowment, private wealth managers in the US and Europe, as well as corporate venture partners, Iverson said, adding that more than half the LPs in the fund were family offices or high-net-worth individuals.
Many such family office investors, he said, tend to immediately characterize food-focused investments as being too linked to either commodity-driven returns or technologies yet to be widely adopted by farmers. By building relationships with the second and third generations within family offices, said Iverson, Manna Tree found investors very focused on positive social impact and often motivated by personal experience with healthy eating.
“Everybody kind of knew the story 10 years ago, but nobody had really come to them with an investment product to help operationalize some of the theories they had conjured up about how poor some of the food was that they were consuming,” he said. “A lot of the foodtech and agtech companies go so hard on the environment side – where we were really resonating with the LPs was more on the medical and health benefits.”
Manna Tree Partners Fund I has a three-year investment window and a strategy focused on primary production, processing, and distribution of healthy food, as well as related consumer and retail companies.
Its four existing investments have included pasture-raised eggs provider Vital Farms and grass-fed organic beef producer Verde Farms. Iverson said the vehicle is currently 25 percent deployed and declined to address return expectations.
Although the remaining six to eight investments likely to come from Fund I will continue with a narrow focus on food, he said the firm may later look to broaden its scope to include other elements of human health and wellbeing.
“As Manna Tree evolves new investment products, there is a lot of things that are connectors to this core thesis of Fund I,” he said.
Still, Iverson said, the kind of transformation necessary in the food system will require billions of dollars in investment.
Although there are many funds active in agtech and consumer-facing food capable of making investments between $500,000 and $5 million, he said, when mission-orientated companies reach later stages of growth, they are often forced to engage generalist investors that can push founders away from their initial visions.
“There needs to be a lot more $25 million checks in the marketplace to help these companies scale,” he said
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