The country?s first and only food and agri focussed private equity fund Rabo Equity Advisors is set to close its second fund of $250 million by Q1 of 2012. The fund is more than double of Rabo?s inaugural fund of $120 million, 80% of which is exhausted. The fund is sponsored by Dutch banking major Rabobank, with IFC, FMO, DEG and CDC as key investors.
Confirming the news, Rajesh Srivastava, CMD, Rabo Equity Advisors told FE: ?We have exhausted more than 50% of our first fund as of now and we are committed to three more investments which will happen in the next three months. That shall amount to 75-80% of fund allocation?.
Banking upon India?s buoyant food and agri story, Srivastava reasoned that doubling the size of the first fund is natural progression. ?We want to raise a $250-million fund backed by the fact that food and agri companies in the last three years have really scaled up and are growing at 20-30%. Given the valuation and investment scenario, if we want to retain the same amount of stake in a company, we will have to deploy more funds,? he said. For the second fund, Rabobank will remain the anchor investor, with a couple of other investors. ?We are not in favour of having too many investors in the fund as it is a difficult and fragmented sector. So we?ll be looking for few investors but with the right pedigree,? he added.
Elaborating on the fund?s investment strategy, Srivastava affirmed: ?In this fund we?ll try and establish business case for private equity in real hardcore food and agriculture. By the time we end our first fund, we?ll make one investment closer to the consumer, but we want to continue with our focus on hardcore food and agri segment.?
The private equity fund has made seven investments so far in companies such as LT Foods, Sri Biotech Labs, GP Agri, Global Green and Vacmet, and is planning an exit from Sri Biotech Labs via an IPO in the near future. Srivastava revealed that Rabo?s eighth investment will close in as early as next month in an agri inputs company.