Caisse de dépôt Launches $125M Ag Fund

April 25, 2017

Caisse de dépôt et placement du Québec (CDPQ) has launched Fonds agroalimentaire CDPQ – a new $125 million fund targeting investments in Québec’s agri-food industry.

CDPQ is one of the leading institutional fund managers in Canada. With $270.7 billion in net assets as of December 31, 2016, la Caisse is a long-term institutional investor that manages funds mainly for public and semi-public pensions and insurance plans.

The fund is part of la Caisse’s strategic plan for the agribusiness sector in Québec, and will target investments of between $1 million and $30 million across the three main segments of the food chain: agricultural production, food processing, and food distribution and marketing, including farmers and SMEs that are looking for growth.

“This is a sector with strong growth potential for Québec. It has all that’s needed to succeed, both at home and in global markets, which are becoming increasingly competitive. For la Caisse, it’s important that both today’s farmers and their successors, as well as companies in the processing, distribution and marketing segments, be well positioned to compete and face the challenges in this sector,” said Christian Dubé, executive vice president, Québec, at la Caisse.

Why Québec?

The agri-food chain in Québec produces a diverse range of high-quality foods, with prominence in the production of maple syrup, pork, milk and dairy products, veal, grain, fruits, and vegetables. Additionally, the province is home to 2,200 food processing businesses including international players, Agropur, Saputo, and Olymel among others, of which, 90 percent are SMEs.

Québec is also home to Exceldor, one of Canada’s biggest food cooperatives, which in June 2014 acquired Ontario-based P&H Foods, the producer of Butterball turkeys in Canada, from its parent company Parrish & Heimbekcer Ltd.

The province is also home to the headquarters of Hortau, one of the leading agtech companies in the irrigation and water management space, that helps growers manage crop stress in real time using soil tension to ensure optimal growth while reducing water and energy usage.

Highline Produce Ltd. – the largest producer of organic mushrooms in the world, has leased facilities across Québec, while the province is also home to  Citadelle Maple Syrup Producers’ Cooperative and Unicoop – two agricultural cooperatives backed by Capital régional et coopératif Desjardins (CRCD).

Every year agriculture accounts for $22 billion of the Province’s gross domestic product (GDP), and agricultural exports from the province are valued in excess of $7.5 billion.

These, and many more agri-food businesses not mentioned here, are examples of what makes Québec well positioned to meet global consumer demand for fresh, safe, healthy foods. To do this, producers and processors in the province are looking to further integrate into the value chain as a means to hedge against volatile commodity prices and climate change, while also improving traceability and maintaining value.

The Fund

Fonds agroalimentaire CDPQ will target investments that meet a range of criteria, according to a company statement, including:

  • A well-structured business plan
  • A well-established management team to provide farmers and entrepreneurs with proper support and structure
  • A transition and succession plan
  • A solid performance track record and growth strategy
  • An investment structure positioning la Caisse as a long-term partner for sustainable businesses and projects.

Investments of between $5 million and $30 million also will be made through funds in partnership with players in the industry and chosen experts in targeted markets.

“As we have done in other industries, la Caisse plans to support promising projects in Québec’s agri-food sector, using a variety of approaches,” said Dubé. “This plan is fully aligned with la Caisse’s business strategy in Québec. Agri-food is a complex, diverse and cutting-edge sector that requires a long-term, viable business environment tailored to its distinctive features, particularly to foster development, innovation and business transfers to the next generation.”

-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.

 

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