January 25, 2019

London-based private equity and advisory firm ADM Capital has had a final close at $332 million for its global agribusiness investment fund ADM Cibus Fund. The firm has also raised an additional $130 million that will be earmarked for co-investments, resulting in the cumulative raising for the fund topping out at $452 million.

ADM Capital announced a first close on the fund at $100 million in mid-2017, on its way to a projected $500 million target.

This was followed a year later by ADM announcing that it was exiting its Central Eastern European and Kazakhstan private equity business through a management buyout; the move being undertaken to position the firm to be better able to focus on its Asian fixed income business, its global Cibus Fund, and its ADM Capital Foundation.

Led by ADM Capital co-founder, Robert Appleby, and Jason Silm, former head of Agribusiness Investment at VTB capital and director at Macquarie Agricultural Funds Management, the fund aims to capitalize upon the significant investment opportunities generated by the ongoing evolution occurring in global demographics and trade patterns, and the inability to meet growing regional demand for high-value foods by some of the world’s fastest growing economies.

Aligning with the fund’s philosophy of partnering with category leaders that have solid leadership teams in place and evident technological advantage resulting in superior returns, the team will seek out investments across North America, Europe, and Australasia in sustainable food companies as well as in seed, fertilizer, and ag machinery and chemical producers, land-light producers of high-value nuts, fruits, vegetables, meat; aquaculture; processors and value-adders; and distributors and logistics providers.

Under the structure of the fund’s investment thesis upon its launch, 90 percent of The Cibus Fund is earmarked to invest in mid-market companies posting an EBITDA in excess of $3 million; while intentions are to invest between $10 million and $75 million (average $45 million) across 10 or 11 deals. For this majority portion of the fund, ADM Capital will be targeting an internal rate of return of between 20 and 25 percent and a return on invested capital of 3x, according to the company.

The remaining 10 percent of the fund will be allocated toward a secondary mandate set to invest in ‘high-growth’ companies in the agtech sector in the same geographies of Europe and Australasia, which notes that the high growth portion of the fund will not be making venture investments, but will be aiming to make average investments of $7 million in Series C and D rounds across seven commercial enterprises with proven positive revenue flows.

To date, the Cibus Fund has made six investments to build out a portfolio that includes AeroFarms, a developer of high-tech, indoor aeroponic vertical farms; Rootility, an Israeli-based developer of innovative root-focused plant breeding methods designed to increase crop yields and overall agronomic performance; Innoliva, one of the largest European producers of extra virgin olive oil; and a 1,000-plus acre fully mature almond orchard in the district of Sunraysia in the state of Victoria, Australia.

“We have been encouraged by the reception Cibus has received,” said Robert Appleby, co-founder and CIO of ADM Capital. “Investors have embraced the opportunities provided by people’s changing diets, particularly backing companies addressing the global challenges of future food production with less land, less water and a lighter ecological footprint. The six companies we have invested in have benefited from our technical competence and global connections.”

-Lynda Kiernan