Regenerate Asset Management has launched a regenerative agriculture fund aimed at making investments to support the European transition to regenerative farmland practices.
The Regenerate European Sustainable Agriculture Fund has received a cornerstone investment of approximately €150 million from M&G Investment’s Catalyst strategy.
Regenerate CEO Ben Stafford and chief investment officer Ryan Cameron declined to disclose the vehicle’s fundraising target to Agri Investor, but Stafford said they would consider it a “success” if they are able to double the initial commitment from M&G.
The pair formerly worked together at Impax Asset Management and left the impact investing firm to establish Regenerate in 2018. The potential for dramatic environmental gains in agriculture encouraged them to focus on the food production industry, said Stafford.
“Our genesis story was really up when we first understood that ag was a place where there’s a huge swing factor from extractive to regenerative,” said Stafford. “So if most ag businesses are emitting one tonne of CO2 per hectare, the capacity to go to a 10 tonnes of carbon sequestered per hectare is actually possible – the swing factor is huge.”
The RESA fund will target agricultural businesses in western Europe that already own farms and will lead them through a regenerative transition over a period of three to five years. The fund will target low double digit returns.
“We are not investing in climate in a way that will appeal to everyone,” said Stafford. “We’re focusing on regenerative livestock, we’re focusing on tree crops, we’re focusing on integration and stacking of revenue in order to get microorganisms back in the soil and regenerate the soil.”
The own and operate strategy will consider investments based on the their potential to transition to regenerative and sustainable practices, added Stafford, and so could invest in a livestock-heavy assets or vice versa.
“A lot of land has been fenced off across the world because it is ‘forest’. [We want to] put that land back into agricultural use for woodland grazing and silvopasture, which is very important to us because it gives livestock a different nutritional profile, which is important to animal health.”
Cameron added: “So long as you are truly arranging land management around climate-conscious food production, where that business model is transitioning towards and promoting the restoration of soil health, that’s what we see to be regenerative. And then you’re layering that with the product opportunities and traceability of the food that you’re producing.”
He added that the firm has already launched and invested a preliminary £3 million ($3.7 million; €3.4 million) venture capital to make complimentary investments in agtech companies aligned to regenerative agriculture.
The firm is now gearing up launch a “larger” VC fund, confirmed Cameron, which will be called Regenerate Ventures.
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