Rabobank, the specialist food and consumer goods bank, has raised $85 million (€53.5 million) for a $100 million fund to invest in India’s food and agri-business sectors.
The India Agri Business Fund will be managed by Rabo Equity Advisors, a subsidiary of Rabobank, which has a 51 percent stake in the fund manager. FMO, the Dutch entrepreneurial bank, and DEG, a German development finance institution, have stakes of 10 percent each in the fund management company, while the remaining 29 percent is held by Rajesh Srivastava, who heads the fund.
Srivastava has been working at Rabobank India since 1998 and is now the chairman and managing director of Rabo Equity Advisors.
Srivastava told PEO that though the initial target of the fund is $100 million, it is likely that it will raise as much as $120 million due to the high levels of interest shown. The fund has among its investors the International Finance Corporation (IFC), the private investment arm of the World Bank; FMO and DEG, who have each committed $20 million to the fund. Rabobank is sponsoring the fund with a $25 million commitment. Another $35 million will be raised from non government-affiliated institutional investors.
The India Agri Business Fund will invest in companies in the Indian food and agri-business sector. Srivastava said that the fund can invest in any of the 38 sub-sectors that they have defined in the food and agri-business space. He added that the fund will also invest in the agri-infrastructure sector in areas such as warehousing, dedicated ports and logistics.
The IFC said in an investment proposal on its website one of the key objectives of India Agri Business Fund was to improve the scalability and operating efficiency of Indian companies in the food and agri-business sectors such that they can make the transition to global levels of competitiveness.
According to Srivastava, the fund will invest $3 million to $10 million per deal, with an average deal size of $7 million. It will make strategic minority investments in exchange for active board participation.
Srivastava said Rabo Equity Advisors will look to raise another fund for India with the same investment strategy following the deployment of its first fund.
Rabo Equity Advisors is headquartered in Delhi and has an investment team of seven people.