SEAF Colombia Agribusiness Fund

Investment Strategy

• The SCAF’s overall objective is to build an institution that will provide expansion capital and business assistance to growth-oriented firms throughout Colombia, primarily those 1) operating in or direclty affecting the agribuiness sector and 2) who source from or have business that supports the rural communities in or with direct impact in the second and third rings.
• SEAF divides opportunities to impact the Colombian rural sector by investing in companies with stakeholders (mainly suppliers of raw materials) from three “rings”:
  • (1) Secure urban and near-urban areas,
  • (2) Secure rural areas, and
  • (3) Rural areas regarded as conflict areas with residual risk of influence.
• The purpose of the capital will be to create sustainable companies that are operationaly sustainable and contributing towards societal impact.
  • Business capacity will be built by strengthening performance, enabling growth generation capabilities, and increasing the average income of portfolio companies.
  • Catlytic impact will be realized through sustainable job creation, reduced poverty, gender equality, and enduring tangible benefits to the local community, national agribusiness economy, and post-conflict peace process in Colombia.
• More specifically, the proposed capacity development program aims to accelerate the growth of SMEs operating within the agribusiness sector in Colombia; doing so through the provision of practical technical and managerial assistance and training, thus accelerating the achievement of the development and economic benefits of the SCAF.

Investment Thesis

• Due to decades of neglect, the Colombian agriculture sector is the least developed in a country with an otherwise vibrant economy.  The decades’- long armed conflict in Colombia has suppressed agribusiness investments, with the result that Colombian agribusiness is well below its potential in productivity.  With peace in Colombia and the government’s commitment to develop Colombia’s national infrastructure, agribusiness is ripe for investment.  Developmentally, such investment and growth should lead to significant employment, direct and indirect, thereby providing opportunity to a rural Colombia long excluded from Colombia’s growth story.
• Despite, or perhaps because of, the long neglect of Colombia’s agribusiness sector, there are many opportunities for growth:  high and growing domestic and exports demand; comparative advantages (strategic location and diverse tropical climates); a sector with high growth outlook given the announced investments to improve infrastructure (the government has announced a significant investment plan and the need for an international “Marshall Plan” to recuperate, especially the most vulnerable regions and communities of the country that have been affected by conflict).
• SCAF will seek to invest in companies that directly or indirectly affect the agribusiness sector and that can contribute to solve the socio-economic problems embedded with the massive migration from Venezuelans into Colombia.  Colombia is naturally the main destiny of Venezuelans, calculated at over 1.5 million.
• The investment strategy and approach – to focus investment on SMEs engaged in agribusiness with a double bottom-line objective, social and financial returns, and to partner closely with management post investment – is a significant differentiator from other financing sources (i.e. generalist commercial private equity funds, banks or other lending institutions, grants, and non-financial aid).

Local Team