Moringa agroforestry fund holds €84m final close

The Edmond de Rothschild investment vehicle seeks to drive returns by reducing risks from social and environmental impact.

Edmond de Rothschild Group’s (EDR) agroforestry fund Moringa has reached a final close on €84 million, short of its initial target of €100 million, according to PEI Research & Analytics.

Investments will be made in sustainable agroforestry projects in Latin America and sub-Saharan Africa, and are likely to range between €4 million and €10 million.

Edmond de Rothschild Private Equity made its first investment through the fund in premium timber and Nicaraguan coffee producer Nicafrance this January. Further investments will focus on biomass, timber, and staple food and export crop producers according to a press release.

Executives with Moringa and its parent company EDR told Agri Investor in October that the fund expected to make at least one investment more before the end of 2015.

The firm’s agroforestry strategy relies on mixing food crops with forest space to create what it says are sustainable, biodiverse agricultural operations with multiple revenue streams.

“It’s really about using the agricultural technology, agroforestry or agro-ecology, to restore degraded soil, to favour conservation and to mitigate climate change,” Clément Chenost, the technical director of Moringa, said.

“We are looking for projects that could address timber and agricultural markets that could provide a good return to our investors. But also we are looking at projects that can provide very strong environmental and social returns.”

Chenost added that the fund is also prioritising projects that extend market access to small farmers, as a risk management strategy. The firm sees negative social and environmental impacts as risks that previous generations of investors often failed to take into account.

“We’re not impact first,” EDR chief executive Johnny El Hachem said. “We’re not generating minimal levels of economic return to achieve high impacts from a social and environmental perspective. What we’re doing from a risk management perspective is mitigating all the factors that might have social or environmental impacts that might affect [returns from] our projects in the long term.”

The fund will be deployed over five years. Edmond de Rothschild Private Equity currently has more than €3 billion deployed across 10 investment strategies in growth capital, emerging economies and real assets.