July 15, 2016

The largest first-time agriculture fund with an exclusive focus on production and supply chain in the Americas has held its final close at $433 million. Blue Road Capital’s Blue Road Capital L.P. was able to secure not only capital for this fund but commitments for future co-investments in platform companies from a diverse group of Limited Partners, including university endowments, pension funds, family offices and real assets investment advisors. With First Point Equity serving as the sole global placement agent, total capital commitments should meet or exceed Blue Road Capital’s original target for the fund.

“We are delighted to have partnered with a number of prominent institutional investors to continue developing businesses in the agricultural production and supply chain market and thank them for their support…We would also like to thank the FirstPoint Equity team for being an excellent partner throughout the fundraising process,” Founding Partner of Blue Road Capital, John Duryea, said in a statement.

Strategy

Blue Road Capital is an agricultural focused private equity investment fund that targets the acquisition of ‘control positions’ in businesses within the agricultural supply chain in the Americas. The firm then partners with management teams to develop added value that goes beyond the intrinsic value of the asset.

Founding Partner, Duryea, was among the featured speakers at the Global AgInvesting conference in New York in 2015. There, Duryea described the firm’s approach, which involves investing directly in assets as opposed to participating in auctions. Secondary commodities with a natural hedge to water, such as pecans, are an area of focus. Blue Road is most interested in the supply chain, which Duryea described as midstream agriculture between production and consumption, to borrow a phrase from the energy sector, he noted. While Blue Road Capital pursues private equity exposure to the supply chain the firm will backward integrate into growing something out of the ground as long as the firm generate approximately 10 to 12 percent rates of return.

Platform Investments

To date the fund has made two investments in platform companies: National Pecan, LLC and The Vangaurd International Group, L.P.

In August of 2015, vertically integrated international produce distributor, Vanguard, announced a strategic investment of $250 million from Blue Road Capital. With production and processing assets in Peru, Vanguard is using the capital to expand its production platform within Peru and beyond.

Prior to the investment in Vanguard, Blue Road Capital made a strategic investment in National Pecan, LLC, a North American producer, processor and distributor of pecans. The platform currently owns and operates farms in Georgia and Arizona and processing and storage facilities in Georgia, Texas and Mexico. Through the development of an integrated platform, National Pecan is capitalizing on the rapid, worldwide demand growth for protein and healthy snack alternatives

Duryea commented in a recent statement, “Our fundraising allows us to build on the substantial progress already made with the National Pecan and Vanguard International platforms, and to invest in additional platforms where we believe we can add substantial value.”

—

Sarah Day Levesque