South Africa-based Futuregrowth Asset Management has earmarked R200 million (US$13.2 million) under its Futuregrowth Development Equity Fund to invest in sustainable aquaculture operations, with the bulk of the funds to be invested in abalone farming companies.

 

The firm, which manages more than 150 billion rand (US$1.47 billion) on behalf of retirement funds, has invested in infrastructure, transport, and pharmaceuticals to date, however the export potential and long-term growth potential within the abalone sector is attractive.

 

“We see this as a strategic play to enhance returns for our shareholders by investing in a sector that shows significant long-term growth prospects with very high export potential,” said Futuregrowth investment analyst Amrish Narrandes in a company statement. “Our investment also meets the mandate of the Futuregrowth Development Equity Fund thanks to the socially responsible, sustainable nature of abalone aquaculture, a sector that remains under-invested in South Africa despite ongoing poaching of wild abalone populations.”

 

Aquaculture currently supplies almost half of all fish consumed by humans worldwide, and is expected to supply 62% by 2030, according to a report by the Centre of Excellence in Natural Resource Management (CENRM) at the University of Western Australia. With production of 1.450 tons, South Africa is the world’s third largest producer of farmed abalone after China, which produces 50,000 tons per year, and South Korea which produces 10,000 tons per year.

 

Although the firm has stated that there is no established timeline within which it plans to commit the investments, the firm has announced it has acquired a minority stake in publicly traded, Abagold Limited, an on-land abalone farming operation in Hermanus for an undisclosed amount.

 

Founded in 1993, Abagold has more than doubled its capacity over the past four years and has grown to produce more than 500 tons of abalone per year, making it the largest producer in South Africa.

 

"From a Futuregrowth perspective, this acquisition of a minority stake in Abagold aligns with our strategy to invest our clients’ funds in high-impact, developmental sectors,” Sarah De Villiers, an investment analyst at Futuregrowth said in a company statement. “Futuregrowth have been pioneers in the developmental investment space, and we are excited to include this investment in Abagold in our developmental portfolio."