On Thursday, a new investment management firm focused on the real assets of agriculture and food production announced its existence. Newly anointed fund manager Solum Partners—launched by former executives from Harvard Management Company, which manages the Ivy League school’s $40 billion-plus endowment— will invest in global agriculture and food opportunities.
Specifically, Solum Partners will target “efficient, large-scale agricultural production assets with potential for vertical integration” in distribution and marketing.
Solum Partners is to be led by CEO Colin Butterfield, formerly HMC Managing Director and its Head of Natural Resources. Butterfield had joined HMC in 2016, having served as CEO of Radar, a $2.2 billion Brazilian farmland investment manager joint venture of pension investor TIAA and Brazilian energy conglomerate Cosan.
“Food value chains need to evolve. Farmers are facing an increasingly challenging operating environment and much more demanding consumers,” Butterfield said in a company statement on the fund launch. “We believe we are in a strong position to help producers navigate this evolution – drawing on our deep agricultural and financial know-how and focus on operational excellence.”
“Our team sees an opportunity to generate attractive risk-adjusted returns by helping agricultural producers who need a true partner,” added Butterfield. “We leverage our hands-on, owner-operator approach along with our deep sector expertise, experience in large scale operations, and world-class global network and asset base designed to add considerable value to our partners and our investors.”
HMC’s natural resource portfolio, which amounted to 4 percent of the endowment’s total assets under management, showed 12.4 percent losses during the 2019 fiscal year, compared to a return of 6.5 percent for all combined investments that year.
Avocados, olive oil
Concurrent with the announcement of the fund launch, Solum Partners confirmed that it has acquired select investments that the team managed or made while at HMC, including a number of avocado, olive oil, apple, blueberry and soybean production assets. Additionally, Solum has acquired HMC’s minority stake—dating from January of this year—in vertically-integrated avocado producer Westfalia Fruit, and California Olive Ranch, a U.S.-based producer of extra virgin olive oil, in which HMC invested back in 2017.
These acquisitions were backed by affiliates of HMC and the investment and insurance group American International Group (AIG), whose Chief Investment Officer Doug Dachille also weighed in on the fund launch.
“Sustainable farming practices are critical to the security of the global food chain,” Dachille said. “We are supportive of opportunities that advance those endeavors.”