Paine Schwartz closes Fund VI on $1.7bn

Paine Schwartz Partners has closed its Food Chain Fund VI on $1.7 billion, exceeding its $1.5 billion target. The fund had a $2 billion hard-cap.

It is the largest food and agribusiness vehicle closed by the New York-based fund manger, surpassing the $1.4 billion Fund V, which reached a final close in 2019.

Food Chain Fund VI received commitments from pension funds including the District of Columbia Retirement Board, the Connecticut Investment Advisory Council and the Rhode Island State Investment Commission.

McKinsey and the Minnesota State Board of Investment are known to have been considering making an investment in the vehicle as well.

Sovereign wealth funds, endowments, foundations and family offices also backed Food Chain Fund VI, said a statement from Paine Schwartz.

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.

The firm has already deployed approximately 40 percent of Fund VI, having made investments in businesses such as Elemental Enzymes, AgroFresh Solutions and Monterey Mushrooms, and has partnered with EQT Future and AM Fresh to merge its portfolio company Special New Fruit Licensing with International Fruit Genetics to create Bloom Fresh International.

Paine Schwartz is also the leading member of a consortium that had a A$1.5 billion ($966 million; €908 million) offer accepted for listed Australian agribusiness Costa Group.

Paine Schwartz previously invested in Costa Group when the former was known as Paine & Partners, acquiring a 50 percent stake in July 2011 through its third fund. After further investment in the firm, Paine & Partners floated Costa on the ASX in July 2015.

“We are pleased to have successfully completed fundraising for Fund VI, and we appreciate the support we received from both existing and new limited partners,” said Paine Schwartz chief executive Kevin Schwartz in a statement.

“Our ability to exceed our initial fundraising target in a challenging market environment reflects our firm’s track record and the continued resonance of our sustainable investment focus with investors. With Fund VI, we are continuing to invest to feed a growing population better food with more efficient use of resources.

“Food and agribusiness has been the fastest growing sector for more than 15 years and continues to be underserved by the investment community. Guided by our core themes, we are targeting investments in segments associated with long-term growth that have limited commodity exposure and limited private equity competition.”

Paine Schwartz currently has $5.7 billion in assets under management.