Gilde Establishes Agribusiness Funds –

UTRECHT, THE NETHERLANDS Seeking to capitalize on developments in agribusiness, Gilde Investment Management, an autonomous subsidiary of Rabobank and one of continental Europe’s longest established venture groups, intends to create a global family of focused food and agribusiness funds.

Gilde plans to form six regional vehicles, which together will form the Global Food & Agribusiness Fund. The first of these, the Gilde Europe Food & Agribusiness Fund (GEFAF), held a euros 100 million ($103 million) first close in October, nearly half way to its Dfl 500 million ($232 million) goal. Prominent among GEFAF’s initial supporters are Spanish investors, including several industrial groups Banco Sabadell and Lagun Aro. The fund also drew significant support from its parent Rabobank and from Novartis. An Australian fund, created in association with Rabobank Australia, already is operational, and Gilde expected a first close on a North American vehicle by the end of 1999. Gilde will also establish regional vehicles for Latin America, Asia and South Africa.

Gilde’s rationale for instituting a focused investment program on such a scale is straightforward enough, but it has radical implications for future structural change in the mainstream food and drink industries.

During the first quarter of the next century, a projected doubling of world population, combined with increasing per capita income, means that food consumption will surge. It is uncertain whether sufficient arable land and fresh water will be available to meet this demand using conventional methods. Accordingly, Gilde predicts that new technologies will have to be developed to bridge the gap between supply and demand. Gilde also believes the food and agribusiness industries now stand on the threshold of a major structural overhaul.

GEFAF is evaluating deal flow spanning sectors from genetically modified organisms technologies, plant growth monitoring and aquaculture through neutraceuticals and antibody production to ingredient manufacture and fresh product quality monitoring.

While most Americans are just hearing about the controversy surrounding genetically altered crops, Europeans have become acutely aware of the debate over genetically modified organisms (GMO) and their potential effects on health and the environment, thanks to the prominence the issue has achieved in the media over the past year.

Yet even without GMOs, agribusiness is big business – and set to become even bigger in the coming years, as there is a need for technologies to enable producers to meet the demands resulting from population growth.

GEFAF had completed two investments by press time, one in Aquasmart International, a Norwegian company with a major share of the fledgling market for interactive feeding systems for fish farms. The other investment was in Primex, also based in Norway, one of the world’s principal manufacturer of chitosan, a biopolymer widely used in the manufacturing of food supplements and cosmetics and medical and water-purification applications.

Gilde’s move is particularly significant, given the absence of specialist European private equity funds operating in the agribusiness sector – or indeed in the “mainstream” food and drink arena – to date.