US private-equity investor Paine Schwartz Partners has successfully closed a $1.7bn fund dedicated to the food and agribusiness sectors. This Paine Schwartz Food Chain Fund VI, surpassing the original target of $1.5bn, is now recognized as the largest fund invested across the food and agribusiness value chain.
Paine Schwartz, with $5.7bn of assets under management, has been specializing in food and food-related investments since 2010. Following the launch of its first food-chain fund in 2014, Fund VI emerges as their largest fund to date, exceeding the size of its previous $1.4bn Fund V by 17%. The fund has attracted a diverse array of real asset, private equity, and impact-oriented investors including pension funds, sovereign wealth funds, endowments/foundations, family offices, and other institutional investors.
Fund VI has a strategic focus on sustainable investments in the food and agribusiness sector. The fund aims to support businesses that enhance agricultural productivity while limiting resource consumption. Additionally, it targets investments that provide access to healthier, more nutritious, and safer food options. By investing in these areas, Paine Schwartz aims to contribute to feeding a growing population better food with more efficient use of resources.
Paine Schwartz’s recent involvement in the takeover bid of Australian fresh fruit and vegetables company Costa Group further showcases the impact of Fund VI. The investor, leading a consortium, successfully had a $1.58bn takeover bid accepted. Currently, approximately 40% of Fund VI has already been deployed through this Costa Group deal and investments in AgroFresh Solutions, Elemental Enzymes, HGS BioScience, and Monterey Mushrooms.
Karen Schwartz, CEO of Paine Schwartz, states, “Our ability to exceed our initial fundraising target in a challenging market environment reflects our firm’s track record and the continued resonance of our sustainable investment focus with investors. With Fund VI, we are continuing to invest in food and agribusiness to meet the increasing demands of a growing population while ensuring efficient resource utilization. Despite being the fastest-growing sector for more than 15 years, food and agribusiness remain underserved by the investment community.”
The District of Columbia Retirement Board and the Connecticut Retirement Plans and Trust Funds are two notable investors who have contributed to Fund VI. By targeting investments in segments associated with long-term growth and limited commodity exposure, Paine Schwartz aims to capitalize on the potential opportunities within the food and drink industry.