AAA Cargill prepares $400m food fund

Cargill prepares $400m food fund

Black River Asset Management, the investment unit of US crops company Cargill, is reportedly raising a $400m fund to invest in companies that will benefit from rising Asian demand for meat and vegetables.

Newswire Reuters said Black River Capital Partners (Food) Fund gained half its target in commitments and would invest about half the money in China.

"GDP [gross domestic product] growth is driving food consumption in emerging markets (and) the demand for safe and high quality food, against a backdrop of outdated production methods and fragmented industry means high margin revenue opportunity for leading players," Black River said in presentation notes seen by Reuters.

According to the presentation, Black River is targeting 30% gross cumulative return per year for the planned food fund, which has a life of 10 years. It will charge a 17.5% performance fee if it achieves a hurdle rate of 8%.

Institutions that have committed money to the food fund include Dutch pension fund PGGM and Utimco, which manages money for the University of Texas and Texas A&M University, according to the presentation, which said Black River was also targeting investors in Singapore and Hong Kong.

Leave a comment

Your email address will not be published. Required fields are marked *