Nuveen’s $169m food waste deal aims to pull agtech into bond markets

Head of ESG for global fixed-income Stephen Liberatore says his clients include a large family office that has identified ag-related start-ups like Do Good Foods as a focus of its green bond strategy.

Fixed-income investors are eager to support sustainable agriculture and related technology, says the executive leading Nuveen’s $169 million investment into upcycling start-up Do Good Foods.

Nuveen’s head of ESG and impact for global fixed-income, Stephen Liberatore, told Agri Investor that the firm’s October investment into Do Good Foods drew from the TIAA-CREF Core Impact Bond Fund. The vehicle’s LPs include family offices, high-net-worth individuals, registered investment advisers, endowments, public and private pensions and others.

Because much of agtech has traditionally relied on private markets for early stage fundraising, he explained, fixed-income investors tend to assume the market is out of their reach.

“There would be more interest if people knew what was available for them,” said Liberatore. “Until people have an idea of what they might be able to invest in, they are not really sure what to ask for. While the private market has a substantial capital base, the public capital base is even larger.”

Much like investors in private markets, Liberatore said, bond markets are focused on sustainable companies able to provide data demonstrating their positive social impact. While investors have grown accustomed to supporting largescale infrastructure projects like wind farms, he added, there is demand for new ways to deploy capital into sectors such as ag.

“We don’t see a tremendous amount of opportunity in this space [agriculture/agtech] as of yet having come to the public market,” said Liberatore. “We have a tremendously rapidly growing investor base and assets that are looking for these types of exposures. We even have investors that are calling out for [agriculture] specifically. That is a unique situation that is starting to evolve.”

Do Good Foods was established by the Kamine Development Corporation, an infrastructure-focused family office headquartered in Bedminster, New Jersey. The company plans to begin offering chicken fed with feed produced from food waste collected from grocery stores. It will begin distributing this under the Do Good Chicken brand early in 2022.

Its executives include former agriculture secretary Ann Veneman and Sam Kass, President Barack Obama’s former chef and nutrition adviser, and a current adviser to the UN.

Nuveen’s bond investment will support the construction of Do Good Foods’ first facility in Fairless Hills, Pennsylvania. The plant is designed to produce nutrient-dense animal feed from 60,000 pounds of fruit, vegetables and animal products collected annually from about 450 grocery stores. Plans call for construction of a network of closed-loop facilities across the US over the next five years.

The potential to help support such expansion is part of what made the company an attractive investment for the Impact Bond Fund, said Liberatore. Liberatore said Nuveen’s Do Good Foods bond could also help to demonstrate the diversity of fixed-income opportunities relevant to ESG and impact.

“We’re hoping the successful completion of this particular transaction may open up additional opportunities that we haven’t seen before,” he added. “It always requires that first issuer to test out the market. It’s a really good sign of maturation of the market itself for these entities to be thinking about – and being able to – successfully go to public market to raise capital.”