Anchor Capital has launched the Anchor Ndalo Fund that invests in agricultural businesses and hopes to raise up to R1.5 billion from institutional investors and ensure the sustainability of the fund by owning as much of the superfoods value chain as possible.
The fund would invest in diverse businesses in the horticulture sector, a statement from the company said. Anchor Group chairman Mike Teke said: “I am expanding my footprint in investing in food security through agriculture and the Anchor Ndalo Agri Fund is one of the many ways I wish to invest in food security for humanity into the future.”
By integrating businesses that comprise the horticulture value chain, the fund aimed to lower investment risk for investors and increase the profitability of the blended return profile of the fund.
The investments comprise suppliers to primary agriculture, such as manufacturers of fertiliser, irrigation, packaging and organic material inputs.
Downstream agricultural investments would include pack-houses and cold storage facilities, end product manufacturers and agri-processing, and logistics suppliers.
Primary agriculture business would make up to 30% of the fund and include large scale commercial farms that were vertically integrated and specialist growers with captive markets.
The fund sought to also diversify its holdings geographically and by crop type to reduce the risk of a single climatic, market or price event affecting returns of a single crop type.
“Food security is a global initiative, and the fund seeks to allocate private capital into the superfoods production value chain at a time when it is both desperately needed and where the growth prospects and consequently the return for investors are the highest possible in this sector with the lowest risk profile,” the company said.
The fund aimed to also deliver social and environmental impacts such as working to ensure food security, creating up to 3000 new jobs, paying salaries above minimum wage, stimulating rural economies, and seeing as much as 2000 hectares of land in production being transferred from fully white-owned to majority black-owned.
The management of the assets would be overseen by a team of agricultural and financial experts, the company said.
Anchor manages more than R110 billion in assets and has a fast-growing footprint in the institutional asset management sector.
BUSINESS REPORT