responsAbility Investments AG has said that it has closed its second private equity growth strategy in Asia and its first mezzanine financing strategy in Latin America. These strategies use the capital deployment experience that responsAbility has to target regional opportunities in agricultural and food value chains that are changing worldwide.
The Sustainable Food in Asia strategy achieved a first close of USD 173 million and will focus on acquiring significant minority stakes in South Asia and Southeast Asia growth companies. The final close is expected to be between $300 and $400 million. Given that Asia is projected to more than double its total food expenditures to more than USD 8 trillion by 2030, the strategy aims to capture the 1,2 billion predominantly young, urbanised consumers who are projected to join the upper-middle-class income bracket. Furthermore, due to the increase in demand for safe, healthy, and convenient food, the investments will target companies in the middle and downstream stages of food production and distribution in South Asia and Southeast Asia (India, Indonesia, Vietnam, and the Philippines).
This strategy has a first close of USD 101 million and will target investments in Latin American producers and exporters of primarily fruits and vegetables (Mexico, Peru, Colombia, and Chile). The region’s competitive advantage in terms of natural resources – availability of land, water, diverse climate zones, and biodiversity – combined with an increasingly health-conscious consumer base, has led to an impressive increase in exports over the past several decades, which is expected to continue into the foreseeable future.
Commenting, Rik Vyverman, Head of Sustainable Food Private Equity of responsAbility said: “We have opted for a structured debt approach (mezzanine finance) given that many of the investment opportunities are family owned and managed businesses and exits are not always obvious. We are aligning ourselves with the entrepreneurs in terms of the growth we are financing and as such are endeavouring to generate attractive risk adjusted returns and provide a recurrent income for our investors at the same time. Obviously, we only select companies that we assess to positively contribute to overcoming the challenges of sustainable food supply and resource efficiency.”
