Roc Partners has reached a final close on A$108 million ($72.5 million; €71.9 million) for the Roc Premium Food Fund, its inaugural commingled fund focused on food and agriculture.
The firm’s partner Brad Mytton confirmed the total to Agri Investor and said that Roc Partners was “very happy” with the result, with around 40 percent of the vehicle’s capital committed to date across five transactions.
Capital for the fund was raised from a mixture of domestic Australian institutional investors, local high-net-worth family office investors and some overseas international wholesale investors. The amount of overseas capital is such that the fund will not trigger any Foreign Investment Review Board thresholds on the deals it does, Mytton said.
Roc Partners aims to complete another two or three deals over the next 12 to 24 months to take the Premium Food Fund to full deployment. The fund held a first close on A$40 million at the end of H1 2021.
Its five investments to date are: wagyu beef producer Stone Axe Pastoral Company; controlled-environment tomato producer Flavorite; almond grower Lachlan River Almonds; cold pressed raw milk business Made by Cow; and stone fruit grower 555 Superfoods.
The fund is currently generating an IRR of 44 percent as of its last valuation date, Mytton said.
“Our model is to partner capital from our commingled funds with our superannuation fund co-investors,” he said, with Roc Partners’ total food and agriculture platform surpassing A$2 billion in assets under management.
The firm is raising another commingled fund, the Roc Agri+ Infrastructure Fund, which focuses on agriculture supply chain investments that are then leased back to counterparties, as well as investments in primary production assets that have an operational component with stable cashflows. It has made two investments to date, including chicken broiler business ProTen, and targets a net IRR of 10 percent to 12 percent.
On appetite for agriculture investments among Australian investors, Mytton said: “There has been renewed interest. Many are talking about inflation, and agriculture is high on the radar when you are thinking about how best to deal with that. Throughout our portfolio, we’ve been able to pass on some cost increases, because we are focused on premium brands.”
Mytton said Roc Partners intends to return to market and raise a second Premium Food Fund in due course, likely launching around 12 months from now, but was currently focused on deploying capital from the first fund. “We need to deploy Fund I first and hopefully achieve a couple of early exits,” he said.
Roc Partners was founded as an independent alternative investment manager following the management buyout of Macquarie Group’s private markets business unit by its senior executives in June 2014.