June 26, 2018

Belgian investment manager Incofin has launched the India Progress Fund – an $80 million fund dedicated to investments in India’s food and agriculture sectors. The vehicle is the first country-specific fund for Incofin, which historically earmarked allocations of between 15 and 20 percent from its previous funds for investments in India.  

The fund is seeking between 50 and 70 percent of its backing from international investors, and is targeting the first quarter of 2019 for its first close, according to Aditya Bhandari, partner and co-head for Asia investments at Incofin, who told the Economic Times that an international cornerstone investor is already secured. 

The news of the launch comes at the same time that Incofin announced its full exit from Annapurna Finance, India, along with its Rural Impulse Fund II (RIF II) and SIDBI Venture Capital, selling a 12.5 percent interest in the agricultural financier for R90cr (US$13.5 million).

Currently Incofin has an investment portfolio standing at $583 million. Over the course of its history the firm has invested a total of $1.6 billion – 74 percent of which has been invested in women-owned operations, according to Impact Alpha.

In regard to India, Incofin currently has exposure totalling $50 million in the country – something which it plans to raise to $150 million by 2020.

Eyes on India

Over the 32 years to 2012 India’s agricultural gross domestic product (GDP) increased at a rate of 3 percent per year, according to the report, India as an Agriculture and High Value Food Powerhouse:  A New Vision for 2030 by McKinsey & Company.

The country’s vast and growing population, combined with increasing affluence and socio-economic shifts, are expected to see the country’s overall food consumption increase by 4 percent per year to 2030, while per capita food consumption is expected to increase by 3 percent per year. Consumption in rural areas is expected to climb by 2.5 percent, while food consumption in urban areas will see double this growth at five percent.

Based on these projections, and the expected growth in the country’s agricultural production, processing, and exporting activities, McKinsey foresees India’s agricultural industry growing at a rate of between 5.2 and 5.7 percent over the next two decades.

Numbers such as these have also attracted social impact, venture capital investor Acumen which announced in April 2017 that it was raising a new fund to focus on the agriculture, water, education, housing, and healthcare sectors in India.

“We are going to become more and more focused on India,” Ajit Mahadevan, India director at Acumen, told Live Mint at the time.  “We have been focused on investing in India, but we will get much deeper in connecting with the right set of people who can further the opportunities for our companies. So we will look at corporate partnerships and raising funds in India.”

-Lynda Kiernan