Published 14 October 2021
LGIAsuper and Energy Super's investment into Equilibrium Capital's Controlled Environment Foods Fund I (CEFFI) has yielded some early returns after CEFFI partially exited its investment in AppHarvest.
AppHarvest is an applied technology company building some of the world's largest indoor controlled environment farms.
CEFFI anchored AppHarvest's initial growth in Morehead, Kentucky by providing more than US$100 million in 2019 to build the company's first advanced greenhouse, and its initial investment provided additional financing to other AppHarvest facilities.
LGIAsuper is CEFFI's largest investor, having committed US$80 million in 2018. When AppHarvest was taken public, CEFFI partially exited its investment, thereby crystallising strong returns for LGIAsuper.
The total CEFFI fund is currently forecasting mid-20 per cent returns.
LGIAsuper and Energy Super Chief Investment Officer Troy Rieck said CEFFI timed the market perfectly.
"CEFFI recognised that COVID disrupting supply chains would drive the need for innovative and sustainable agriculture. Controlled environment agriculture facilities can provide sustainable and safer fruits and vegetables for a growing global population," Mr Rieck said.
"CEFFI is a 10-year portfolio, so it was pleasing to receive strong interest in our investments relatively early into the investment period.”
Mr Rieck said "The agriculture sector will feel the impacts of climate change as soon as any other industry, so it is imperative we look for alternative assets that will help build a better world that can sustain our current and future members through their retirement journeys," he said.
"These high-tech greenhouses typically use fewer resources than traditional agriculture and allows for production closer to major population centres, which means fresher produce for consumers."
Please note any future performance is not guaranteed and past performance is not a reliable indicator of future performance.