Agriculture, Farmland Attracting “Impact Investors”

Investors are being given a new pitch these days: Make money and do good by investing in agriculture in Africa, Latin America and other global markets.

So-called “impact investing” is catching on with a range of private equity groups, financial services firms, venture capital funds and other moneyed players.

“There are a cadre of investors who are working under the hypothesis that one can invest for the long term in a manner that is both economically sustainable and socially palatable,” said Ademola Adesina, a former investment banker for JPMorgan who oversees business development and corporate strategy for AQUIFER, an investment company.

“Long-term sustainabi lity, particularly in agriculture, requires a deep collaboration and symbiosis between investor activities and the communities in which they operate,” Adesina said.

Diana Glassman of EBG Capital said her firm is one of a growing number of players steering millions of dollars into such impact investments.

“You make money and do good, but it really is a pursuit of profit,” said Glassman.

The interest is growing so rapidly that several larger players last year launched the Global Impact Invest ing Network (GINN). It includes such well-known banking names as JP Morgan Chase, Morgan Stanley, and Deutsche Bank, as well as private investment groups.

“The approach of the community we work with in general is to identify the kind of benefits that create a return … but also create local benefits,” said Camilla Seth, GINN director of programs and operations.

For Bos ton-based Root Capi tal , impact invest ing means focusing on financing small farmer groups or suppliers in countries where capital for those groups is hard to come by.

Founded by former Lehman Brothers financial analyst William Foote, Root has a main focus in Latin America but has been expanding into Africa over the last five years. Its finance arm is involved in everything from cashews to cocoa.

This year about 80 per cent of its $75 million in credit disbursements will go to Latin American businesses with 20 per cent concentrated in Africa, Foote said.

Last month the firm made its first loan in Tanzania a $150,000 loan to a maize seed company, and issued a $700,000 working capital loan to an organic cotton farmer co-operative in Uganda.

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