Fundraising

Minnesota SBI mulls $150m commitment to Paine Schwartz Fund VI

If approved at the pension’s investment meeting in March, the $1.5bn vehicle will have taken at least $765m in commitments.

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The Minnesota State Board of Investment is considering a $150 million commitment to the Paine Schwartz Partners Food Chain VI vehicle.

Staff at the $123 billion pension made the recommendation at its investment advisory council meeting in February. The commitment will be presented to the State Board of Investment on March 2 for approval.

Paine Schwartz Food Chain Fund VI is targeting $1.5 billion and has a $2 billion hard-cap. The vehicle had raised at least $615 million by September 2022 from a range of LPs including the Connecticut Investment Advisory Council, the El Paso Firemen & Policemen’s Pension Fund and the Rhode Island State Investment Commission.

According to materials presented by New York-headquartered Paine Schwartz at a Rhode Island SIC meeting in June 2022, the vehicle will seek a preferred return of 8 percent over an investment period lasting five years from final close.

The 10-year fund’s terms include a GP commitment of 2 percent, 20 percent carried interest and management fees of 2 percent during commitment period and 2 percent of net invested capital thereafter.

Providing that Minnesota’s $150 million commitment is approved at its March meeting, the fund will have taken at least $765 million by the end of Q1.

“Fund VI will focus on investment opportunities in the global food and agribusiness sectors,” said the Minnesota SIB meeting materials. “Consistent with the Fund V strategy, Fund VI will focus on sustainable food chain investing, adopting a proactive, thesis-driven approach to identify value-added and differentiated companies primarily in the upstream segments of the value chain.”

The materials added that capital will be deployed in OECD countries, will have a focus on underserved food and agribusiness sectors and said the investment team will take a “hands-on and active ownership approach […] to add value through active board seat participation and leadership on critical decision-making.”

If this latest potential commitment progresses, Minnesota will have deployed more than $550 million across Paine’s series of food and agriculture investment vehicles.