Convent Capital holds first close for Agri Food Growth Fund

The fund has a EUR 150m target, although its documentation allows for a final close above this amount, Convent Capital Principal Bor Boer told Unquote.

Convent Capital said in a statement that the fund was launched following demand from investors who were not able to commit to the GP’s first private equity fund. It aims to use its experience with growth companies while addressing opportunities in the agri food market.

Boer and fellow principal Steve Mcloughlin both joined Convent Capital in 2021 as part of the launch of the fund. Boer is a co-founder of food, agriculture and agricultural technology-focused corporate finance firm TerraProtein Equity Partners, while Mcloughlin was also a partner at the firm.

Alongside the fund launch, Convent Capital has announced the fund’s first investment: Netherlands-based plant-based animal feed additives producer Animal Health Concepts (AHC). Founded in 2012 and headquartered in Heino, the company aims to reduce the need to administer antibiotics and to improve the food conversion ratio with its liquified, phytogenic-based food additives for poultry, livestock and shrimps.

The investment was initially made via a warehouse structure in January 2022, Boer said.

The fund will measure the impact of its investments in line with the UN’s Sustainable Development Goals (SDGs), with a focus on Climate and Biodiversity (namely, SDGs 2, 12, 13, 14 and 15). The progress of these goals will be assessed by an independent investment committee and MJ Hudson, with carried interest to be donated to a sustainable charity if the financial hurdle is met but the impact hurdle is not.

The vehicle is an Article 9 fund within the Sustsinable Finance Disclosure Regulation (SFDR).

Convent Capital was formed in 2011 and has typically focused on Benelux-based SMEs. Its current portfolio includes Netherlands-based Creators of the Outside World (CROWD), a group of companies specialising in public space design for projects related to bikes, playgrounds and sport.

Investors
The fund expects to draw commitments from institutional investors in the coming months. It is currently backed by investors with a track record in agri food investments, according to the statement.

Boer told Unquote that the fund's LP base is primarily composed of European family offices. The GP is in discussions with further institutional investors, he added.

Investments
The fund will aim to invest in innovative, sustainable B2B agricultural food businesses in areas including distribution and service. It will not invest in retail businesses, according to the statement. It expects to make growth capital investments of EUR 5m-EUR 20m over the lifetime of each investment.

The vehicle will invest in OECD countries and at least 50% of its investments will be in Europe, Boer said. For its investments outside Europe, the fund will seek companies with an established presence in their home market that also have a European growth strategy or market, Boer said.

The vehicle expects to make 10-12 investments, Boer said. "We look for significant minority positions that allow us to bring capital and our experience or expertise as professional investors together with our global AgriFood network," he told Unquote. "We will however take majority positions in certain cases."

People
Convent Capital – Bor Boer, Steve Mcloughlin (principals).

[Editor's note: This article and its headline were updated post-publication to add comments from Bor Boer at Convent Capital. 19.04.22: This article was updated to clarify the ESG-linked carried interest donation structure of the fund.]

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