Specialist climate impact investment manager Regenerate Asset Management has launched its latest €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, creating long-term value by expanding and diversifying cropping and production. A 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 RESA fund offers investors exposure to a natural capital strategy which provides real asset capital protection, long-term positive climate impact, and provides 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 practices, generating market-rate private equity returns for investors while delivering positive, science-based environmental impact.
At the same time, the deal advances Regenerate’s mission to attract capital investment that drives systemic change in agricultural practices, further establishing regenerative agriculture as a key pillar of the growing natural capital asset class.
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.”
Key attributes of the deal include converting and expanding the land from low-margin cereal crops to pistachio orchards and premium cherries, increasing and diversifying revenue potential per hectare with high demand, high-value crops; creating opportunities to scale with further local farming acquisitions from an extensive pipeline; optimising the use of “soil regeneration” cropping between rows to enhance the farming system; and increasing biodiversity.
RESA received a €150m cornerstone investment from M&G’s Catalyst strategy – a £5bn 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. The RESA fund remains open to further institutional investment.
