December 3, 2024

By Gerelyn Terzo, Global AgInvesting Media

Regenerative agriculture is spreading like wildfire. Toesca Asset Management, a Santiago, Chile-based asset manager, and U.K.-domiciled Astarte Capital Partners, which specializes in sustainable real assets and natural capital, have announced a strategic partnership. Through the collaboration, the firms will establish an institutional platform dedicated to regenerative ag investments in the Latin American region.

With a $350 million target size, the Toesca Permanent Crops II (TPC II) fund will invest in a diversified portfolio of permanent crops throughout Latin America, including Chile and Peru. To kick off the investment strategy, Toesca and Astarte have earmarked $45 million in sponsor capital.

The portfolio seeks to deliver financial returns through high-performance orchards comprising strategically chosen species, all of which must meet high operational, environmental and social standards, according to the announcement. With an initial focus on permanent crops, TPC II will begin making investments in early 2025. Permanent crops are experiencing heightened demand amid a change in consumer preferences toward better eating habits and sustainable goals around food security.

Together, Toesca and Astarte form a powerhouse for regenerative ag investing, overseeing more than 82,000 hectares (202,626 acres) of natural capital assets across South America. Both firms boast proven track records of attractive financial returns, carbon sequestration, and positive environmental and social impacts. Latin America contributes 16 percent of global food and ag exports and is considered a major player in global food security. However, the region is also vulnerable to the impact of climate change, making regenerative ag practices that much more critical for Latin American growers.

Toesca Asset Management CEO and Partner Carlos Saieh expressed his enthusiasm for the new fund, stating, “The combination of the natural competitive advantages of Chile and Peru for fruit production, along with the opportunity to provide counter-cyclical produce to the Northern Hemisphere, all within a dollarized industry, makes this investment case hard to beat compared to other alternatives. We’ve been carefully observing how institutional capital is starting to flow into the asset class in the region, and it is a wave that can only grow, further confirming our optimism about the future of this strategy.”

Astarte Capital Partners Co-Founder Teresa Farmaki, said, “Regenerative agriculture investments are an emerging sector with tremendous potential, acting as a crucial catalyst for sustainability and food security. Developing sustainable agricultural assets generates significant environmental and social benefits, perfectly aligning with our commitment to responsible business practices.”

Earlier this year, Astarte reached final close on an impact forestry fund with $325 million in assets under management, which aims to strengthen Paraguay’s economy through sustainable forestry, surpassing its original target of $200 million. The fund attracted investors from over two dozen countries across five continents, making it one of the biggest and most diverse capital pools ever formed in Paraguay.

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