September 27, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

With decades of experience and $5.7 billion of assets under management, Paine Schwartz has established itself as a leader in the rapidly growing and highly dynamic global food and agribusiness investment ecosystems. 

Among its track record of successes, the firm’s Fund IV closed oversubscribed at $893 million in the final days of 2014. And Paine Schwartz Food Chain Fund V, which was announced in May 2019, closed months later, in October of that year at $1.425 billion.

Then came the Paine Schwartz Food Chain Fund VI – its largest fund to-date – with a funding goal of $1.5 billion, and a hard cap set at $2 billion. Surpassing this target, Paine Schwartz has now announced that Fund VI has completed its final closing at $1.7 billion – making it 17 percent larger than its predecessor Fund V. 

“With Fund VI, we are continuing to invest to feed a growing population better food with more efficient use of resources,” said Schwartz. “Food and agribusiness has been the fastest growing sector for more than 15 years and continues to be underserved by the investment community.” 

Paine Schwartz explained that this 10-year fund has attracted commitments from a diverse roster of pension funds, sovereign wealth funds, endowments and foundations, family offices, real asset, private equity, impact-oriented investor, and other institutional backers. 

“We are pleased to have successfully completed fundraising for Fund VI, and we appreciate the support we received from both existing and new limited partners,” said Kevin Schwartz, CEO, Paine Schwartz. “Our ability to exceed our initial fundraising target in a challenging market environment reflects our firm’s track record and the continued resonance of our sustainable investment focus with investors.”

Paine Schwartz noted that it has already deployed approximately 40 percent of Fund VI across investments including AgroFresh Solutions, Elemental Enzymes, HGS BioScience, Monterey Mushrooms, and most recently, a blockbuster AUD1.5 billion deal for leading Australian fresh fruit and vegetable grower, packer, and distributor Costa Group.

This most recent acquisition has been cooking for a while. In May of this year, PSP placed an initial all-cash offer on the table of A$3.50 per share. However, following Costa Group’s announcement on August 24 that unfavorable growing conditions led to a write down of $30 million, PSP cut its offer by $139 million.

Ultimately, a revised offer was made at A$3.20 per share and was accepted, resulting in an enterprise value for Costa Group of approximately A$2.46 billion (US$1.6 billion). 

“With Fund VI, we are continuing to invest to feed a growing population better food with more efficient use of resources,” said Schwartz. “Food and agribusiness has been the fastest growing sector for more than 15 years and continues to be underserved by the investment community.” 

As the fund progresses, Paine Shwartz will continue to seek out attractive and actionable investment opportunities for Fund VI across two core themes while integrating its ESG platform across its portfolio to drive growth and make a positive impact:

~ Productivity and sustainability: entailing businesses that enhance agricultural production while limiting resource consumption. 

~ Health and wellness: including businesses that provide access to healthier, more nutritious, and safer foods. 

“Guided by our core themes, we are targeting investments in segments associated with long-term growth that have limited commodity exposure and limited private equity competition,” said Schwartz. “We look forward to leveraging our deep knowledge, industry relationships and thesis-driven approach to capture the numerous attractive value creation opportunities we see ahead.”

~ Lynda Kiernan-Stone is editor in chief 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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