In agricultural capital placements

Actors along the agri-investment chain. Re-drawn from: Ouma 2020: 59.

It is important to scrutinize the flesh-and-blood institutions behind “finance-gone-farming”. The so-called AG investment space is populated by a wide range of players: pension funds, insurance companies, investment banks, family offices, high-net-worth individuals, sovereign wealth funds and university endowments can be found here.

A good overview is provided in the figure above, which shows the dominant actors along the agri-investment chain.

A recent trend in the chain has also been that large agrobusiness companies – such as Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus; the so-called ABCD companies – set up PE subsidiaries. (for more information on the PE model, click here) This ensures more control of the agri-food chain and enables to them capitalize on in-house information and already-existing access to land in the world regions in which they operate. Also, state-backed players such as sovereign wealth funds or development finance institutions may provide debt, equity and/or risk insurance. For instance, half of the 54 PE funds with a focus on agriculture that were targeting the African market in 2013 were backed by development finance. Those development finance institutions see themselves as providers of patient capital in order to fill in the financing gap in regions with high barriers to accessing commercial institutional capital.

In the following, the most common players in the agri-investment chain are introduced.

(Ouma 2020: 52-59)