Fund focus: New name, same agribusiness strategy

The private equity team of Black River Asset Management were confident. They were always the best-performing division in the agriculture and commodities-focused firm - the alternative investment management branch of agribusiness giant Cargill - and the parent company knew it.

So when it was announced in September that Black River would separate from Cargill and split into three employee-owned firms, the PE team gave its enthusiastic assent. Now known as Proterra Investment Partners, with offices in Singapore, Shanghai, Mumbai and Sydney, the firm is looking to build on the foundations it has already laid.

"On a day-to-day operating basis on the investment side, nothing has changed. Same people, same team, same investment strategy, same portfolio companies, same investors," says Tai Lin, managing director and head of Proterra in China. "On day one Proterra started with 49 people in six offices, and $2.1 billion in AUM [assets under management]."

Despite emphasizing continuity, Proterra is careful to emphasize its independence. Cargill remains an important LP, but it is by no means the only, or even the largest investor in Proterra's funds. The other investors include university endowments and pension funds, mostly from the US and Europe.

As for the future, Proterra will continue to pursue the sector specialization that it began as part of Black River. Out of its $2.1 billion AUM, nearly $2 billion are concentrated in food and agriculture investments in Asia, Australia and other emerging markets, with meat, dairy and farming highly represented. The firm also operates a mining fund with a corpus of about $165 million.

"Obviously coming out of Cargill it was natural that we would have this focus, and I'd say that's really what differentiates us," says Lin. "I don't think there are many other groups in the world, on the PE side, that operate on a pan-Asian, or even a global basis, and focus on food and agri."

Portfolio investments in Asia include China's fifth-largest dairy farming company, AustAsia, and Indonesian dairy producer Greenfields, along with a banana plantation in Southeast Asia. It also owns agricultural land in Australia. Assets outside the region range from poultry in South Africa to cropland in South America. Investments to date have fallen between $15 million and $125 million.

One significant planned strategic change is to offer more co-investment to the LP base. Proterra's future investments will also be weighted toward control deals, enabling the firm to implement operational initiatives. For these the firm can draw on its established relationship with Cargill, which can provide assistance from both the supply and demand side.

"Now that we've done so many years of focusing on this industry and this area, we have a lot of cross-fertilization between our portfolio companies, or between their various operations and people we know," says Lin.

 

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• Topics
• GPs
• Industrials
• Buyouts
• Proterra Investment Partners
• Agriculture
• Commodities
• GPs
• Asia
• China
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• India