Vistra and Citi support the start of the Food Securities Fund, allowing institutional investors to achieve environmental and social impact at attractive risk-adjusted returns
The Food Securities Fund provides working capital loans to sustainable agriculture companies in emerging and developing markets, with an initial focus on Sub Saharan Africa. The Fund addresses the gap in season-long loans for agriculture production in emerging markets, contributing to the UN Sustainable Development Goals (SDGs) by promoting climate smart agriculture and responsible, deforestation-free supply chains. It counts on a guarantee from the United States International Development Finance Corporation (DFC), supported by USAID’s Bureau for Resilience and Food Security, and support from the Good Energies Foundation, Convergence, Conservation International, WWF USA, and the Global Environment Facility, among other funders and backers.
The Food Securities Fund has been developed by Clarmondial with input from leading institutional investors, agribusinesses, and conservation organizations. It combines an innovative private debt investment strategy with a regulated fund structure in Luxembourg that offers quarterly liquidity and aims to deliver change at scale. The Fund is classified under article 9 of the Sustainable Finance Disclosure Rule (SFDR). The Fund started operations and concluded its first investment in March 2021.
Citi acts as the Fund’s Central Administration Agent and Depository. This work builds on Citi’s longstanding leadership and innovation in Environmental, Social and Governance (ESG) activities. Since 2005, through a specialist team dedicated to social and inclusive finance, Citi has developed solutions that enable its clients and partners to expand access to financial services and advance economic progress in underserved market segments across the globe. Adding to this momentum, earlier this year Citi announced a USD$1 trillion commitment to sustainable finance by 2030.
Jonas Bossau, Director, Citi, mentioned that “as a global bank with a mission to enable economic growth and progress, we are committed to driving inclusive, social and sustainable finance solutions. The Food Securities Fund is a fabulous opportunity to harness the power of prominent investors and targeted investments to build on our track record of catalyzing social and inclusive finance and to help drive food security in developing markets around the world”.
Vistra Fund Management’s AIFM ManCo services and proven track record of helping funds across the world was key to enabling the regulated fund structure setup in Luxembourg. Vistra Group, a leading provider of expert advisory and specialized fund administration services to Alternative Funds, Corporate, Capital Markets and Private Wealth clients, was delighted to seal the partnership with Clarmondial and Citi. Vistra works with a number of the leading Private Equity and not-for-profit investment funds around the world. Vistra’s capabilities enable investment organizations around the world to grow, manage, structure and transact their investment opportunities with a range of industry leading services.
Jan Vanhoutte, Managing Director & Conducting Officer of Vistra Fund Management, added that “combining our proven track record in managing alternative investment funds and our expertise in interpretation and implementation of SFDR was key in helping Food Securities Fund deal with their regulatory requirements. We’re delighted that Vistra has been able to provide these essential services so that Clarmondial can focus their efforts on originating and executing the best investments to foster sustainable agriculture supply chains and catalyse environmental and social impact”.
Fred Werneck, co-founder of Clarmondial, commented that “agriculture supply chains urgently need working capital to support the uptake of sustainable practices, improve smallholder farmer livelihoods, and address climate change and biodiversity loss. With Citi and Vistra on board, the Food Securities Fund is well placed to channel institutional capital to unlock change at the required scale”.