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Agricultural Investment Funds for Development

Descriptive Analysis and Lessons Learned from Fund Management, Performance and Private-Public Collaboration

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This publication explores agricultural investment funds as a vehicle for financing agricultural businesses and projects. It looks at the capital needs of the different agricultural actors along the agricultural value chain and taking into consideration investment funds involving all kinds of investors (private, public as well as joint initiatives) and investment objectives. The publication draws heavily from the FAO 2010 publication “Agricultural Investment Funds for Developing Countries”, which was developed from an FAO-ConCAP research study that identified a broad range of investment funds that target agriculture in developing and transitioning countries. The identified funds were classified according to various criteria such as geographic distribution, capital, shareholder and investor base, investment instruments, target group served and financial performance, as well as organizational and operational structure. In this context, 63 agricultural investment funds fitting the selection criteria were identified and used in this study.

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Preface

Agricultural investment funds are experiencing significant growth in numbers and volume, underscoring the private sector’s interest in agricultural investment and the public’s interest due to the fact that they help to address the resource constraints for achieving food security and rural development. The attractiveness of agricultural investments as profitable business ventures — due to higher food prices and growth trends, natural resource scarcity, and improved business climates that favour longer-term investments — however is tempered by the risks associated with such investments. Agricultural investment funds are an investment structure to channel investment while mitigating risks to investors in the sector. This publication builds on the 2010 FAO document “Agricultural investment funds for developing countries”, which provided a broad description of private, public and private–public agricultural investment funds and case examples from Africa and Eastern Europe. It was the result of a comprehensive research study undertaken in collaboration with ConCap Connective Capital of the Frankfurt School of Finance and Management, which later formed the Finance-in-Motion fund management company.

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