Sydney-based private equity firm Roc Partners is raising capital for its first fund dedicated to food and agribusiness.
The firm confirmed to Agri Investor that fundraising is underway with a target of A$200 million ($155 million; €128 million) and a hard-cap of A$300 million.
A close for the fund is expected at some point in the first half of 2021.
“Fund investments will focus on premium food categories where Australia has a natural competitive advantage due to scale and water resources, with a focus on vertical integration where branded products can be taken to end consumers,” partner Brad Mytton told Agri Investor.
“Our investments will seek to control the entire supply chain with that vertical integration to minimize volatility.”
The firm has already made several investments from the fund.
“Investments will generally be made in operating businesses with the ability to deliver highly attractive returns for investors, with transactions underwritten to deliver 20 percent net IRR,” Mytton said.
Roc Partners has been increasingly active in the agriculture private equity space in recent years, with deals including the acquisition of Emerald Grain from Sumitomo Corporation in December 2020, greenhouse tomato grower Flavorite in July 2020, and wagyu beef producer Stone Axe Pastoral Company in 2015.
Its other brands include Australia’s Oyster Coast, one of the world’s largest producers and processers of Sydney Rock Oysters, and Hive + Wellness Group, a premium seller of honey brands including Capilano Honey.
All of these investments are capital light, with Roc Partners and the funds it manages not owning many physical assets such as farmland, instead leasing it where required. Agri Investor understands that future investments from the new fund will generally follow a similar strategy.
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, with an eye to doing more agriculture private equity deals.