June 29, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Two U.S. pension funds have announced capital commitments to Paine Schwartz’ Food Chain Fund VI as they re-examine and adjust allocations due to shifting conditions. 

With 20 years of experience and having invested more than $2 billion in equity capital, Paine Schwartz has established itself as a leader in the space. Working within a research-intensive investment framework, Paine Schwartz employs a primary research, thesis, and operationally-driven approach that when combined with the firm’s domain expertise and deep well of industry relationships, has been able to unlock growth via control positions.

Announced in May 2019, Fund V closed months later, in October of that year at $1.425 billion, and its predecessor, Fund IV closed oversubscribed at $893 million in the final days of 2014.

Upon a significant commitment of $50 million from the Rhode Island State Investment Commission and the closing of Fund V in October 2019, Kevin Schwartz, CEO and founding partner of Paine Schwartz, commented, “We have seen an increasing number of institutional investors focused on the food and agribusiness opportunity set, along with the need for sustainability, which is synergistic with driving positive investment outcomes in this sector.”

Rhode Island

This interest continues to be evident, as the $10.5 billion Rhode Island State Investment Commission has now returned to invest $30 million in Paine Schwartz Food Chain Fund VI, and another $15 million to an aligned co-investment vehicle.

This marks the tenth and final private equity commitment being made by the pension fund for this year, bringing total private equity commitments to $290 million, according to Saul Ioffe, investment analyst with Rhode Island State. It also surpasses total expected PE investments for the year by the pension fund, which projected deploying between $200 million – $250 million from five to 10 funds this year, noted Ioffe to Buyout Insider.

Although the targeted corpus for Fund VI is as-of-yet unknown, Ioffe noted that the fund can expect to pursue as many as 12 buyout deals in sustainable agricultural and/or food.

El Paso 

Within the same week, the $2 billion El Paso Firemen & Policemen’s Pension Fund announced its commitment of $15 million to Paine Schwartz Food Chain Fund VI. The commitment was approved by its Board at its meeting held on June 22, according to Tyler Grossman, executive director of the pension fund. 

Similarly to Rhode Island, the El Paso Firemen & Policemen’s Pension Fund is also a return investor in Paine Schwartz, having already committed $7 million to Paine Schwartz’ Fund V in 2019.

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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