Research Outline

VC and PE Investment: ROI

Goals

To determine how the investment returns (or AuM value if investment returns are not found) for PE and VC investors compare to the traditional investments (public investments) in the global food and agriculture space based on investment returns and the future growth of the market for modern and traditional investors. Also determine what other funds are either returning or claiming to return in terms of Internal Rates of Return (IRRs).

Early Findings

As we dove into the background research of this topic, we reviewed several sources including market databases, advisory firm databases, and others. Unfortunately, information regarding what other funds are returning or claiming to return in terms of IRR doesn't seem to be available in the public domain. However, we were able to gather some helpful insights during our initial research. A summary of our findings is provided below:
  • The private equity funds have seen continuous growth in recent years. Currently, there are 105 PE funds in global food and agriculture space with over $23 billion in AuM.
  • A shift has been observed from public investments to private equity investments in recent years. While in 2010, the public investment (or traditional investment) represented 62% of total Aum, but in 2017 they represent only 11% of total AuM.
  • The VC investment sector has remained a niche segment in terms of AuM. Despite the small relative size, the VC sector is rapidly growing.
  • Investment managed by forestry funds and other funds adds over $100 billion in AuM.
  • According to a report provided by GIIN 2018, 57% of respondents had allocations to impact investments, more than any other sector.
  • It is of note that the impact investment fund has grown by a compound annual growth rate (CAGR) of 13% for their collective AUM in recent years.