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Research Outline

Prepared for nick S. | Delivered September 26, 2019

Investment Returns in Food and Agriculture Space

Goals

To understand the investment returns in the food and agriculture space for both private equity investors as well as venture capital investors and know how these investment returns compare to traditional investments in order to make the case that private equity and venture capital investment in the food and agriculture space (excluding farmland investments) have competitive returns.

Early Findings

While the private equity firms and venture capital firms don't tend to reveal their investment returns publicly, they tend to provide information on their total assets under management (AuM). The assets under management also include investment returns; therefore, the AuM figures have been provided for private equity and venture capital investors.

GLOBAL PRIVATE EQUITY INVESTORS

  • According to a 2018 report by Valoral, the private equity sector for investment in the food and agriculture space, excluding farmland investments, continues to grow.
  • In total, there were 446 investment funds specialized in the food and agriculture space in 2018 with a total AuM of $73 billion. With a total AuM of approximately $23 billion (including investment returns), there were more than 105 private equity funds specialized in the food and agriculture space in 2018.
  • Therefore, 31.51% of the global assets under management value (including investment returns) in the food and agriculture space belonged to the private equity investors.
  • According to Preqin Survey, 2018, "90% of respondents said that their PE investments met or exceeded their expectations over the past year, and 83% said that their confidence in fund performance has either not changed or increased."

GLOBAL VENTURE CAPITAL INVESTORS

  • According to a report by Valoral, 5% of the total global AuM ($73 billion) in the food and agriculture space belonged to the venture capital investors, which amounts to $3.65 billion in AuM.
  • The percentages of the venture capital funds by main investing regions are presented below:
  • North America: 66% 
  • Europe: 20% 
  • Asia Pacific: 7% 
  • Oceania: 3% 
  • Africa: 2% 
  • South America: 1%