EXEO Capital, the partnership between South African private equity firm Agri-Vie and STANLIB, the pan-Africa asset management firm, held a first close for the second Agri-Vie fund last week, landing $100 million and beating the firm’s initial target by 30%.
Development finance institutions and private sector institutions provided an equal amount of the capital commitment, an improvement on Fund I which saw DFIs providing the bulk of the capital. Insurance companies and foundations provided 35% of Fund I’s capital raised. So far, two of the four Fund I investors have re-upped for this second fund, and its expected another may follow as soon as they can do so.
Agri-Vie II will target opportunities in mid to lower mid cap food and agribusinesses, with a focus on those firms that add value in the food and agribusiness supply chain as well as those who product the inputs used by commercial agriculture. Typically, it’s expected that investments will range between $5 million and $10 million in size in firms producing and selling Animal and plant proteins, prepared foods, non-alcoholic beverages, dairy, food ingredients, condiments or providing food and commodity storages and logistics services. Initially, the fund will have a regional bias to East and Southern Africa, while keeping an eye on West Africa for potential investment opportunities in the near future.
The fund, which is a 10-year fund with the possibility of extensions, will look to deliver a net annual return in excess of 15%. To date the fund has made no investments, although it expects to make around two to three deals per year. Having achieved its first close, the fund is set to start deploying capital in the next few months on deals that had been prepared prior to last week’s announcement.