Global Ag Investing
By Lynda Kiernan, Global AgInvesting Media
Equilibrium Capital Group, an asset manager focused on sustainable and impact-driven real asset agricultural and agricultural distributed infrastructure, announced its first investment outside the U.S.
Finka, an owner of advanced greenhouses based in Queretaro, Mexico, that pioneered the original Agropark, and that has managed multiple large scale greenhouses in the region under the United Farms name for more than 10 years, announced an undisclosed strategic investment from Equilibrium Capital Group to be used to break ground on a 22-hectare expansion.
Overall, the 80-hectare expansion project will include The Center for Controlled Environment Technology Transfer and Training, which will foster the development of the next generation of talent needed to bring Finka’s growth potential to reality.
“Building on our experiences with the first Agropark, Finka´s expansion will give us the scale and training facilities needed to build a leading Mexican greenhouse platform,” said Mauricio Revah, CEO, Finka.
“Equilibrium is the most experienced North American greenhouse investor and gives us the cross-border industry leverage and experienced capital partner we need.”
Equilibrium is not only the most experienced North American greenhouse investor, it is also the largest vegetable greenhouse owner in the U.S., and a pioneer that accomplished a series of “firsts”.
David Chen, chairman of Equilibrium, noted as a featured speaker for a GAI Webinar on July 15, 2020 titled, Why Are So Few Institutional Investors and Ag-Focused Asset Managers Capitalizing on Controlled Environment Agriculture (CEA) Opportunities?, that Equilibrium was the first to:
– Establish a green building real estate strategy in 2008,
~ Launch a pure-play sustainable permanent crop strategy in 2011,
~ Launch the first closed-loop wastewater energy strategy in 2012,
~ And establish the first high-tech production greenhouse ag portfolio in 2017.
Equilibrium Capital goes beyond investment to be an technology-literate operator of assets, offering expertise in managing, design, processing, and the build-out of greenhouse infrastructure – all built around sustainability as an operating tool.
“At the heart of our company and the way that we do our investment strategy development is that we are value chain analysts…” said Chen while speaking at the July 15 GAI Webinar, “… we’re always looking at the value chain and asking how is the status quo changing, and is there a major disruptor that changes the economics of the value chain that gives us an entry point to build a value added portfolio?”
For Equilibrium, Finka represents a value chain disruptor in an industry that Mauricio Revah, CEO of Finka, sees as high-potential.
“We see significant opportunities for both expansion and consolidation in the Mexican greenhouse industry,” said Revah.
Chen, who will be giving a presentation on controlled environment agriculture (CEA) at Global AgInvesting 2020 Online later this month, added, “Finka was instrumental in the development of the Agropark model and is an example of Equilibrium’s commitment to supporting market leaders.”
“Mexico is a critical part of the North American food system and this was a great opportunity to accelerate that growth of Finka as a leader in Mexican greenhouse agriculture. We believe it will drive synergies across our portfolio platforms, including in the U.S.”
Equilibrium’s portfolio platforms have been significantly built-out in recent years.
In February 2019, it was announced that Australia’s LGIAsuper was capitalizing upon consumer demand for high quality fresh food by committing $112 million to Equilibrium Capital’s newest fund – a vehicle focused on investment opportunities in fresh food production in North America.
“What we see is that the growth has accelerated in the U.S, following a growing market demand,” said Chen at the time.
“The expansion is no longer five hectares, ten hectares, the expansion is now twenty, thirty hectares, maybe fifty hectares. In this accelerating industry, growers are discovering that access to all forms of equity capital is a competitive advantage.”
That same month, Equilibrium Capital Group announced a partnership via equity investment in Houweling’s Group, an advanced greenhouse grower of tomatoes, bell peppers, and cucumbers. Together, Equilibrium and Houweling’s are modernizing and expanding Houweling’s advanced technology greenhouse facilities located in California and Utah.
These investments followed closely upon Equilibrium’s $11.3 million investment in the Minnesota-based greenhouse operations of Revol Greens in December 2018.
Combined, the investments made by Equilibrium in these large-scale greenhouse operations across California, Utah, and Minnesota exceed $100 million, according to Impact Alpha, and will support Houweling’s and Revol in doubling the size of their operations over the coming years.
As the newest Equilibrium portfolio member, Finka stated that preparations for the first phase of the 80-hectare expansion are currently underway, and that the initial phase may be ready for planting as early as 2021.
– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at [email protected]