May 17, 2017

London-based private equity and advisory firm ADM Capital announced the first $100 million close for global agribusiness investment vehicle, The Cibus Fund.

Led by ADM Capital co-founder, Robert Appleby and Jason Silm, former head of Agribusiness Investment at VTB capital and director at Macquarie Agricultural Funds Management, the fund aims to capitalize upon the significant investment opportunities generated by the ongoing evolution occurring in global demographics and trade patterns, and the inability to meet growing regional demand for high-value foods by some of the world’s fastest growing economies.

“With an unrivaled network built up over 20 years of investing, deep agribusiness sector knowledge, and a proven investment track record, we are able to clearly identify the structural growth drivers that are reshaping ecosystems and deliver on the opportunities these present for value creation,” said Appleby.

Toward this end, ADM Capital tells GAI News that the “sweet spot” for the Cibus Fund will be in producers and processors that are seeking growth capital to achieve greater value through both horizontal and vertical integration in the supply chain.

Aligning with the fund’s philosophy of partnering with category leaders that have solid leadership teams in place and evident technological advantage resulting in superior returns, the team will seek out investments along the value chain including in seed, fertilizer, and ag machinery and chemical producers, land-light producers of high-value nuts, fruits, vegetables, meat; aquaculture; processors and value-adders; and distributors and logistics providers.

Details

Although not able to disclose investment amounts due to confidentiality agreements, ADM Capital did inform GAI News that the fund has attracted high quality cornerstone investors that include Arch Capital Group Ltd., an unnamed U.S.-based pension fund, and ADM Capital. Continuing  to target a wide range of global institutional investors, the fund is targeting a $500 million close in 2018.

“Arch has had a long relationship with ADM Capital, and we are very pleased to be a cornerstone investor in the Cibus Fund,” said W. Preston Hutchings, CIP of Arch Capital Group Ltd.  “The impact of emerging market food demand is changing the world’s food map and creating significant investment opportunities.”

Under the structure of the fund’s investment thesis, 90 percent of The Cibus Fund will be earmarked to invest in mid-market companies posting an EBITDA in excess of $3 million; investing between $10 million and $75 million (average $45 million) across 10 or 11 deals. For this majority portion of the fund, ADM Capital will be targeting an internal rate of return of between 20 and 25 percent and a return on invested capital of 3x, according to the company.

The remaining 10 percent of the fund will be allocated toward a secondary mandate set to invest in ‘high-growth’ companies in the agtech sector in the same geographies of Europe and Australasia, according to ADM Capital, which notes that the high growth portion of the fund will not be making venture investments, but will be aiming to make average investments of $7 million in Series C and D rounds across seven commercial enterprises with proven positive revenue flows.

The firm told GAI News that it expects to close on two investment opportunities in the near future, adding that there exists a healthy pipeline of investment opportunities.

“As a zoologist by training, a financier by necessity and a conservationist by choice, I am passionate about identifying companies that work towards meeting the global challenges of sustainable food supply and resource efficiency,” noted Appleby. “We welcome The Cibus Fund’s new investors and look forward to advising on our robust pipeline of opportunities and delivering outperformance.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.