TIAA and AGR nearly halfway to agribusiness fund target

TGAM Agribusiness Fund, which will invest debt to obtain non-controlling positions in family-owned businesses, added $9.6m in July to move it nearly halfway to its $600m target.

TGAM Agribusiness Fund, an agribusiness-focused investment vehicle being raised by AGR Partners and TIAA-CREFF Alternatives Advisors, has raised $262.5 million since July last year, according to a regulatory filing made Wednesday.

The filing shows that TGAM Agribusiness Fund – B, a vehicle that will be combined with commitments being made to the main fund, has raised $9.6 million from one investor since last July, with the primary fund, TGAM Agribusiness Fund, raising $252.9 million from 14 investors over the same period.

A source familiar with the fund told Agri Investor that the $9.6 million raised via TGAM Agribusiness Fund – B will go toward the $600 million target for TGAM Agribusiness Fund, which began fundraising in March 2016.

A separate source told Agri Investor that TGAM Agribusiness Fund will focus on taking minority positions in family-owned businesses in the mid-to-upstream agriculture sector. The source said they understood some of the investments from the fund will be made in the form of mezzanine debt.

“They go in and look for family-run businesses that may not meet the traditional debt criteria of lenders and will come in and take that extra risk in exchange for warrants, and the warrants will transmit into minority ownership once the debt is repaid. That’s one of their preferred pathways to their investments,” the source said. “They’ll look at anything, but their push is that product.”

In a March interview Ejnar Knudsen, chief executive of AGR Partners said that the firm targets returns in the mid-teens to 20 percent through growth equity investments of between $25 million and $200 million in processing companies with more than $100 million in sales.