responsAbility launches second private debt fund
responsAbility Investments is adding to its portfolio of investment products with the launch of a new private debt fund for sustainable agriculture in developing and emerging countries. The Luxembourg-domiciled Agriculture Fund finances successful companies that help to improve the economic livelihoods of the rural population. The fund aims to generate both competitive market-based returns and a development impact.
The global population is growing. In order to meet the increasing demand for food, annual investments of about USD 83 billion are necessary in the agricultural sector.
This also applies to developing and emerging countries, where 34% of the workforce is employed in agriculture and smallholder farmers dominate the sector.
By providing these farmers with access to capital and efficient supply chains, companies strengthen value chains, promote environmentally sustainable agricultural practices, boost local economic growth and help to improve rural livelihoods.
The result is both economic success and a development impact in line with the United Nations’ Sustainable Development Goals (SDGs).
The newly launched responsAbility fund offers private debt financing to sustainability-oriented and economically successful companies within the agricultural value chain.
This money is used for short-term export and working capital financings as well as for the medium-term financing of investments.
Strict selection criteria, a clearly defined environmental, social and governance (ESG) risk process and optimised collateralisation structures reduce the credit risk.
Since 2003, responsAbility has developed comprehensive expertise in the agricultural sector. The Swiss-domiciled Fair Agriculture Fund, which was launched in 2011, managed assets worth USD 177 million with investments in 113 companies in 44 countries at the end of March 2018.
A European fund will now be added to the portfolio. The Luxembourg-domiciled fund targets qualified investors, primarily in Europe, who are seeking access to this growth market.
“The agricultural sector in emerging markets holds enormous potential for investors.”
“The agricultural sector in developing and emerging countries is not only central to the further development of these markets – it also holds enormous potential for investors,” says Roland Pfeuti, Head Investment Solutions & Sales / Member of the Executive Management at responsAbility. “We are pleased to make this potential accessible to investors outside Switzerland as well, in a fund structure that they are familiar with.”
“By teaming up with responsAbility, we will be able to access this market with an experienced and knowledgeable investment specialist.”
Marjoleine van der Peet, Kempen Capital Management
Speaking on behalf of Dutch-based anchor investor Kempen Capital Management, Senior Portfolio Manager Marjoleine van der Peet said: “We are convinced of the investment potential of sustainable agriculture in emerging economies. By teaming up with responsAbility, we will be able to access this market with an experienced and knowledgeable investment specialist, thereby ensuring we meet our financial targets while at the same time contributing to development by supporting agricultural best practice and improving living conditions of smallholder farmers. This is a perfect example of the type of investment we aim for with our Global Impact Pool to achieve both societal goals and financial returns.”