Old Mutual’s South Africa-based insurance arm has committed R500 million ($47.5 million; €34.4 million) to the firm’s Old Mutual Agri Fund II, a South African-focused buy-and-lease investment fund.
It represents the second LP commitment and half the fund’s R1 billion target. The other investor is another large South African institution, according to Olivier Lebleu, head of international business at Old Mutual Asset Management International.
The firm has also recently opened a new pan-Africa fund, Old Mutual African Agricultural Fund, will buy farms and plantations outside of South Africa.
“The fund is driven by the opportunity to aggregate farms, add efficiency, and then to sell them onto operators that would not have been able to find them themselves,” said Lebleu.
The fund will also invest into the local communities building schools, housing and healthcare facilities to support the farm workers, added Lebleu.
The firm’s first agriculture fund, the R462 million Old Mutual Agri Fund, closed in late 2013. It is already 100 percent deployed into South Africa and has the same ’10-year-plus-one-plus-one’ structure.
The pan-Africa fund is expected to close for the first time during the second quarter of the year. It started fundraising at the start of the year. It will invest across Africa and has pinpointed Morocco, Senegal and South Africa in particular. In Morocco the fund is most likely to invest in permanent crops such a fruit.
Old Mutual has $5.5 billion of assets under management in real assets including agriculture.