Agri-vie Fund I, the Africa food and agribusiness investment fund managed by pan-African private equity investment firm EXEO Capital, has announced its exit from abalone farming company HIK Abalone Farm
The Agri-vie interest was sold to African Pioneer Group, a black-owned investment company, with other interests in the fishing sector.
Izak Strauss, EXEO Capital partner, said: “With the ocean’s natural resources coming under increasing pressure, we have long had a keen interest in investing in good, viable aquaculture projects. Established in 1998 in the Southern African coastal town of Hermanus, HIK was already a well-established company at the time of investment and had an excellent management team.
“Furthermore, most of their income was USD-based, which promised a good rand hedge for the fund,” Strauss added.
This reasoning proved sound, based on the impressive return achieved by the fund upon exiting.
“Over the eight-year investment term, we invested a total sum of R41.5m in two tranches and achieved an excellent return that is in line with expectations for private equity investments,” said Strauss.
“We were also able to enhance our knowledge of aquaculture business in our interaction with the company and industry. We expanded our network in the industry by building a strong relationship with management and fellow shareholders.”
Strauss believes that this interaction at board level and with management also contributed to HIK’S expansion as a business.
“Over the eight-year investment term, we were able to assist the company in improving the evaluation of new investments and capital projects, as well as improve their financial reporting and corporate governance.”
While this exit brings to a close partnership between EXEO Capital and HIK, Strauss said that aquaculture remains a focus area for current investments.
“Just last year, our AgriVie Fund II concluded an investment into Terrasan – a fast-growing aquaculture company operating on the South and West coasts of South Africa. This is our second Agri -Vie Fund, building on the success of its predecessor $100m Fund.”
