Proterra targets $500m for credit fund after $150m first close

Proterra Investment Partners has reached a first close on $150 million for the second iteration of its credit fund, which a source tells Agri Investor is seeking $500 million.

A mid-September regulatory filing showed the Minneapolis-headquartered firm has raised $151.5 million from 14 LPs for Proterra Credit Fund 2 since its first sale in September.

A source familiar with the strategy told Agri Investor Proterra is seeking $500 million for the vehicle from a combination of pensions, endowments and family offices. According to the filing, Proterra is working with New York-headquartered placement agent Four Points Capital Partners, which declined to comment.

At a late October board meeting, the Teachers Retirement System of Illinois committed $75 million to Proterra Credit Fund 2 from its $15.8 billion income portfolio.

TRS Illinois was also among the investors in the first iteration of Proterra Credit Fund, which was launched in March 2019 and raised at least $136.8 million, according to an April 2019 regulatory filing. A separate filing the same day showed Proterra had raised $55 million from three LPs for a vehicle called Proterra Credit Fund Offshore.

Proterra’s credit strategy focuses on the provision of junior debt to mid-market agribusiness companies in partnership with senior lenders in the US Farm Credit System, a March filing explained. Its website adds that the firm aims to concentrate its credit strategy capital in floating-rate secured term loans.

Proterra managing director Jonathan Logan told an audience at affiliate title Private Debt Investor’s 2019 New York Forum that the Farm Credit partnership facilitated access to the sector-focused senior lenders that make up about 40 percent of agricultural lending. He added that Proterra’s US-focused credit vehicle was devoted to the provision of credit to 25 agricultural subsectors traditionally underserved by lenders.

“When a Farm Credit customer comes forward with a project or growth event and they are looking for some different type of capital to fund that event, that’s when Proterra might come in,” explained Logan, who is among Proterra executives listed on the September 2021 filing for Credit Fund 2.

Logan told an online publication of the University of Michigan in 2019 that Proterra’s credit strategy focuses on both sponsored and non-sponsored transactions ranging between $10 million and $50 million.

“We finance firms throughout the ag value chain, including first-stage and value-add processors, integrated producers and other companies seeking to meet the evolving needs of today’s customer,” he said, highlighting projects related to the shift to cage-free egg production as the type of consumer-driven opportunities Proterra is seeking.

“While the private debt space has seen significant inflows of capital over the past decade, our strategy is a niche one – our investment professionals are experts in the sector and our focus on food and agribusiness is a narrow one,” Logan added.

Proterra, which manages $3.6 billion and spun-out from former Cargill subsidiary Black River Asset Management, declined to comment. Last month, the firm added recently-retired Cargill chief financial officer David Dines as a strategic adviser.