Warburg's Chang Sun targets $1b China agribusiness fund
Black Soil Capital Partners, a private equity firm newly formed by Chang Sun, formerly Asia managing director at Warburg Pincus, is looking to raise $1 billion for its debut China agriculture-focused fund.
The fund, which would be by some distance the largest in China's agribusiness space, comprises two vehicles - a US dollar-denominated fund and a renminbi fund - each with a target of $500 million, according to people familiar with the situation.
Chinese agriculture is highly-fragmented and challenged by inefficiency and low productivity. One of the root causes is the dominance of small-scale farms, usually family-operated. Black Soil plans to achieve consolidation by securing long-term leases over land from farmers and developing a US-style industrialized agriculture model.
The firm will focus in particular on the northern Chinese province of Heilongjiang, one of the world's three major soil zones with favorable organics for farming. Major crops include corn, soybeans, rice and wheat.Sun has recruited several agriculture experts to his team. Among them is David Liu, who previously served as China country manager for DuPont Pioneer and focused on promoting hybrid seeds to improve crop yields.
Last month, China-focused food and agriculture specialist Hosen Capital launched a $400 million fund. The private equity firm, which counts domestic agribusiness conglomerate New Hope Group as an anchor investor in its funds, invests all the way along the food value chain, from agricultural inputs through processing and manufacturing, logistics and retail to consumer goods.
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