Pontifax AgTech Closes Second Fund at $302 million - Wall Street Journal

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Pontifax AgTech Closes Second Fund at $302 Million

The California firm invests in technology used in the food and agriculture sector

Corn awaits harvesting on a farm in Iowa. Pontifax AgTech is backing Provivi Inc., a biotechnology company that is developing a pheromone-based product designed to protect field crops from pests.

PHOTO: JACK KURTZ/ZUMA PRESS

By Chris Cumming Updated Oct. 8, 2020

"Pontifax AgTech Management has closed its sophomore fund at nearly three times the size of its debut vehicle. Pontifax Global Food and Agriculture Fund II closed at $302 million, just above the fund's $300 million hard cap, the firm said Thursday. The predecessor fund closed in 2017 with $105 million. Because of strong demand from investors, the firm raised its cap for the second fund from an initial $250 million, said Phil Erlanger, a Pontifax AgTech co-founder and managing partner. About 70% of the money raised came from new investors, said fellow managing partner and co-founder, Ben Belldegrun. The Santa Monica, Calif., firm also expects to deploy significant additional capital through co- investments. It invested $58 million in co-investment capital alongside its first fund.

Formed in 2013, Pontifax AgTech makes growth investments in established companies that provide technology for the food and agriculture sector. It is a strategic partner of Pontifax Group, a health- care-focused venture-capital firm.

While Pontifax AgTech isn't a dedicated environmental, social and governance firm, its fundraising benefited from growing demand for socially and environmentally responsible investing, as well as growing interest in the agriculture sector, Mr. Belldegrun said.

"There was a lot of investor interest that spanned real assets, traditional private equity and ESG,"

he said. "Our investors were very interested in profit with a purpose."

In addition, the pandemic has spurred more interest in life sciences investments, giving the fundraising process a further boost, he said.

Private-equity firms have been busy in the food and agriculture sector this year, despite the general slowdown in mergers and acquisitions caused by the pandemic. In the U.S., private-equity sponsors have invested $980 million in the agribusiness and food and beverage sectors so far in 2020, after committing $1.67 billion last year, according to Dealogic Ltd., a financial data tracker.

Pontifax AgTech has so far invested in 11 companies. It has exited two: Blue River Technology Inc., a robotics and automation company for crop cultivation, and Precision Biosciences Inc., which makes gene-editing technology with both human and agricultural applications.

Pontifax AgTech has so far made one investment from the new fund, acquiring Provivi Inc., which makes pheromone-based pest control products for major crops such as corn and soybeans."