U.S.-based private equity group Proterra Investment Partners has invested a substantial $100 million in Indonesia’s FKS Food & Agri in exchange for a minority stake in the company.

FKS Food & Agri is a key part of southeast Asian holding company FKS Group, sourcing food and agricultural products through its global network, with strong marketing, shipping, logistics and distribution management across Indonesia. The group is a major importer, trader processor, and distributor of grain commodities and feed, and is the number one importer and distributor of soybeans and soybean meal in Indonesia, according to the company’s website.

Minnesota-based Proterra Investment Partners was launched as a new private equity firm in January 2016 as part of a three-way split announced by Cargill the previous September. Spun off from Black River Asset Management, the firm, which is led by Roch Gammil, had more than $2.1 billion in assets under management at the point of spin-off, with $1.2 billion committed to three ag-focused funds and $782 million allocated to three food-focused funds, according to Deal Street Asia.

On September 28, 2015 Cargill announced it was splitting Black River into three companies under a planned restructure aimed at making Cargill lighter on its feet and more able to quickly respond to a fluctuating commodities market. Of the three planned companies, Proterra was the largest with 49 employees and offices in London, Shanghai, Sydney, Singapore, New Delhi, Sao Paulo, and Buenos Aires, according to Reuters, and investments spanning Asia, Australia, sub-Saharan Africa, and South America according to Ned Dau, chief marketing officer and head of investor relations for Proterra.

When determining regions for agricultural investment, the firm takes into account sovereign risk; a country’s regulatory environment; land values; yield optimization; what crops are produced and local cost of production; weather and execution risks; and environmental impact.

Under an own and operation model, the firm seeks out capable and reputable local operators, providing the capital, equipment and technology to maximize yields while achieving scale and minimizing environmental impact.

When considering food investments, the firm focuses on three main categories: protein production, value-added processing, and supply chain management. These areas of focus were determined to be the best investment opportunities in the face of continued urbanization, shifting dietary demands calling for more protein and food safety, and expanding middle classes in emerging markets.

Protein production investments by the firm include dairy farming, aquaculture, and hog and poultry farming. Value addition investments could include meat and dairy processing, food ingredients, juices and beverages; while investments in supply chain management.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.