Vision Ridge’s $1.25bn Fund III pursues water and protein investments

Managing partner Reuben Munger says the Sustainable Asset Fund exceeded its $1bn target and the four and a half month fund raise reflects investor appetite for sustainable real assets.

Vision Ridge Partners has closed its third fund on $1.25 billion through commitments from foundations, consultants and public pensions to a sustainability strategy that includes agriculture alongside energy and transportation.

Managing partner Reuben Munger told Agri Investor the fact Fund III exceeded its $1 billion target in four and a half months reflects growing investor interest in sustainable real assets. Vision Ridge pursues a roughly even balance with other target markets of mobility and energy, he said, adding that ag’s key role in the broader “sustainability phenomenon” is well-understood by LPs.

“Agriculture in some ways was an attractor for us to investors,” he said. “That expertise and know-how broadened our networks and was different than being just a straight power investor, or even green mobility investor.”

Munger highlighted that Fund III attracted more public pension plan investors than its predecessor, which closed on $670 million in 2018.

Commitments to Fund III included $20 million from the San Mateo County Employees’ Retirement Association, $25 million from the Alameda County Employees’ Retirement Association and $15 million from the Arlington County Virginia Employees Retirement System.

Other investors in the vehicle included endowments, family offices and consultants investing through both their own funds and as outsourced chief investment officers, according to Munger.

Vision Ridge was formed in 2008 and manages $2.45 billion across its three funds and co-investments from offices in New York and Colorado.

Its ag-related investments have included Scottish salmon farm Loch Duart; Homer LLC, a collection of California water assets in which Renewable Resources Group is an investor; and California fruit genetics research and licensing business Sun World. Vision Ridge sold its stake in Sun World to Bridgepoint in early April that was also backed by RRG.

Water remains an important area of focus for Vision Ridge, said Munger, adding that Fund III’s strategy includes scope for investments in water as a physical asset as well as related technology.

Plans for the vehicle call for between eight and 12 investments of between $75 million and $175 million. Munger said Vision Ridge has recently investigated alternative protein supply chains as well.

“Proteins have probably been the most active area, both with the sustainable salmon business we invested in about a year ago and what’s probably coming next within agriculture for us,” he said.

Though special purpose acquisition vehicles may be an expanding area of exits and pathways to additional capital, Munger said, they are not yet quite ready for complex real assets that need to grow and scale. Developments over next 12 to 18 months, he added, could determine how durable they will be in the long run.

“There is a moment in time that’s good for those, which either is ‘nearly nascent’ or ‘clear and developed’ and we’ll see how that pathway transforms,” he said.

“It’s helpful to see that ag and some of the excitement taking place within agriculture broadly is being embraced by the public markets and over time, there’ll be more companies and pathways for investors to act. Right now, the list is pretty short, still.”