Specialist climate impact investment manager, Regenerate Asset Management, has today announced the launch of its next EUR 50m regenerative agriculture platform in Spain, supported by its Regenerate European Sustainable Agriculture (RESA) fund.
The investment will convert the existing farming practices away from intensive cereal production and into high value tree crops of pistachios and cherries, alongside livestock. The farms have huge potential for long-term value by expanding and diversifying cropping and production. An expertly crafted regeneration plan will be implemented across the farms to establish farming principles which restore soil health and revitalise biodiversity. Alongside the production of sustainable food and fibre, the farms will generate opportunities to sell carbon credits by sequestering and storing carbon in the farmland soils.
The deal advances Regenerate’s mission to attract capital investment to drive systemic change in agricultural practices and helps further establish regenerative agriculture as an integral pillar of the growing natural capital asset class.
RESA received a €150m cornerstone investment from the M&G’s Catalyst strategy – a £5 billion purpose-led flexible private markets strategy which invests globally in innovative solutions to some of the world’s biggest environmental and social challenges while seeking to deliver long-term financial returns to investors.
Commenting on the deal, Ben Stafford, Chief Executive Officer of Regenerate, said, “We are facing a triple environmental collapse of climate, water and biodiversity. The world’s collective impact so far has been to tackle one issue, this investment will tackle all three.
“As investors increasingly seek natural capital opportunities, regenerative farming provides tangible environmental outcomes. These investments are rooted in defensive ownership of land assets and therefore also provide the added benefit of inflation risk mitigation. Our fund has now completed three substantial investments in the Iberian peninsula, and plans to expand its reach further across the region and North West Europe.”
Elaborating further, Ryan Cameron, Chief Investment Officer of Regenerate, said, “This is a distinct opportunity to create both immediate and long-term value through smart, sustainable practices. We’re diversifying crops and introducing livestock to increase productivity and create additional revenue streams.
“The land benefits from long-term sustainable water and our regenerative approach will further bolster its water resilience. We will focus on improving costs and driving profit per hectare while promoting ecological health. By moving away from chemical pesticides and fertilisers and towards natural, microbe-rich alternatives, we’ll improve soil health, lower input costs, and create a thriving, balanced ecosystem. It’s a win-win for the environment and the bottom line.”
Key elements of the deal:
- Highest value land use – Converting and expanding the land from low-margin cereal crops to pistachio orchards and premium cherries, increasing revenue potential per hectare with high-demand, high-value crops
- Diversification of revenues – Creating a multi-layered revenue model by integrating high value cropping and livestock
- Premium product – Spain is renowned for its world-class produce, with global demand surging for its premium quality pistachios
- Buy and build – Opportunity to scale with further local farming acquisitions from an extensive pipeline
- Armour the soil – Optimising the use of soil regeneration cropping between rows to enhance the farming system. Permanent cropping will strengthen soil protection, with a focus on increasing canopy coverage at multiple levels
- Increase biodiversity – Both farms will enhance the use of cover crops, integrate additional cash crops, and incorporate livestock. In Spain, where hedgerows and forested areas are scarce, areas for new hedgerows, habitat creation, and native species will be identified
Regenerate Asset Management says that RESA is a unique and innovative impact fund, offering investors exposure to a natural capital strategy which provides real asset capital protection, long-term positive climate impact and a hedge against rising inflation. This recent investment aligns with RESA’s strategy to enhance land backed positions where it can add value through regenerative agriculture best practice in a way that generates market rate private equity returns for investors, while also delivering positive science-based environmental impact on the planet. The RESA fund remains open to further institutional investment.