Agri-Vie is a private equity investment fund focused on agribusiness in Sub-Saharan Africa with a mission to generate an above average investment return, as well as demonstrable socio-economic development impacts through its equity investments. The fund was initiated by SP-aktif and Sanlam Private Equity with the cooperation of South African and international investors as well as the Makotulo BEE Consortium. The fund’s vision is to be a catalyst for sustainable growth through investing in one of the foundation sectors of Africa’s economies. Agri-Vie seeks to realise this vision through deploying development capital and management know-how according to sound investment and business principles. Agri-Vie Investment Advisors is a financial services provider authorized by the Financial Services Board, Registration number 33826. Visit www.agrivie.com for more information.
March 2013: The potential of agriculture and agribusiness in Africa is immense and is a central to Africa’s economic development, but only if properly and effectively harnessed.
This is according to Ernest Tettey, Chief Portfolio Officer at the African Development Bank (AFD), who says that within the Sub-Sahara African (SSA) economy, agribusiness forms a significant and growing sector. “For several SSA countries, the share of agribusiness services and manufacturing are expected to account for at least a third of GDP growth rate.”
The AFD has a mandate to contribute to the sustainable economic development and social progress of its regional members by mobilizing and allocating resources for investment in its regional member countries.
Herman Marais, managing partner at Agri-Vie, the Sub-Saharan private equity fund investing in food and agribusiness, agrees stating that investing in emerging farmers without them having ready access to markets can be counter-productive. “Africa has more than 60% of unutilised arable land globally. Investing in vertically integrated food and agribusinesses that offers off-take opportunities to contract farmers and outgrowers goes hand in hand with technical assistance that empowers emerging farmers with know-how on good agronomic and business practices.”
The AFD is a key investor in Agri-Vie, who provides an appropriate vehicle to channel funds for meeting Africa’s growing investment needs in agriculture. “The AFD holds a seat in the private equity’s advisory board, which ensures that other important crosscutting objectives are mainstreamed into investee companies.
“The Bank’s presence further seeks to align Agri-Vie’s fund structure and terms with international best corporate practice. It also seeks to ensure compliance with international E&S standards,” Tettey says.
Several countries in SSA have comparative advantages in agriculture in terms of land availability, soil fertility, good climatic conditions and water availability. “However, with the challenges in the global food situation, the need to invest in the region’s agriculture sector has become more imperative than ever. These investments will contribute to job creation, enhancement of food security, income generation, poverty reduction, and skills transfer,” Tettey states.
Marais says that Agri-Vie’s fund is on track to delivering its targeted, risk adjusted return in excess of major stock market indices. “Agri-Vie multi-disciplinary investment team has established strategic relationships in its target sectors and countries, giving the fund access to an ongoing flow of often exclusive investment opportunities. With sustainability as a key investment criterion and its cross continent investing, investors benefit from specialist sector knowledge and a risk-diversified portfolio of direct investments.”
“Being only the first private equity fund of scale US$ 110 million focusing on the food and agri-sector, and launched from South Africa in 2008, Agri-Vie has completed more than half of its capital deployment and envisages to complete its current investment programme over the next two years,” say Marais.
“Private equity investments of this nature also aim to support infrastructure development. Under its mid-term strategy, the Bank seeks to increase selectivity and develop a more robust private sector,” concludes Tettey.