Investment Strategy

Whole Agriculture Value Chain

Our strategy is to invest across the entire agricultural value chain, from farm inputs to consumer products, focusing on clear cash-flow events and strong off-takers.

Inputs/Extraction: Supply of essential resources like seeds, fertilizers, energy, and equipment or extraction of raw materials (e.g. water, minerals). Investment focus: Input manufacturing, seed technology, soil enhancers and agri-input distribution networks.
Production/Farming: Cultivation of crops and livestock, including land preparation, planting, irrigation, pest control, and harvesting. Investment focus: Farm management systems, precision agriculture, climate-resilient farming, sustainable land use.
Processing: Converting raw products into usable forms (e.g. milling grains, juicing fruit, pasteurizing milk). Investment focus: Agro-processing facilities, food safety technologies and value-added product development.
Distribution: Transportation and storage of goods from farms to local and international markets, critical for reducing post-harvest losses and maximising margins. Investment focus: Cold-chain logistics, rural transportation, agri-supply chain platforms, warehousing.
Packaging: Protecting and presentation of products for sale, also serving branding and regulatory functions. Investment focus: Sustainable packaging solutions, biodegradable materials, labeling technology.
Manufacturing: Transformation into consumer-ready products (e.g., cereals, snacks, dairy products). Investment focus: Food manufacturing plants, automation in food processing and product innovation.
Retail: Delivery of products to consumers via shops, supermarkets, or digital platforms. Investment focus: Agri-retail platforms, direct-to-consumer models and food traceability solutions.
Consumption: End-user preferences and trends that drive sustainable demand. Investment focus: Consumer analytics, market trend forecasting and ethical or health-focused food brands.
End of Life: Disposal or repurposing of waste and packaging through composting, recycling, or recovery. Investment focus: Food waste recovery, composting technologies, circular agri-economy startups.

Target investments

Majority of our investments are between R15 million and R100 million, with term between 6 to 12 months. Our target counterparties generally demonstrate:

An established operating history
Production offtake agreements with established exporters or local chains
Experienced and aligned management
Positive operating cash flow or a credible path to cash generation
Appropriate collateral or other forms of credit enhancement
Transparent financial reporting and strong governance
Responsible environmental and social practices

We may invest directly or alongside banks, development finance institutions, commodity partners and other institutional capital providers.

Financing Structures

Our investments are structured to best align with counterparty cashflows and maximise collateral cover:

Fixed income investments, for example, harvest purchase and re-sale to offtakers or equipment purchase and rent/re-sale to farmers.
Equity investments, for example, share purchase in agri businesses or joint-ventures.
Mezzanine investments, for example, financing expansion or green field projects with agreed profit sharing arrangements.

Origination advantage

Our investment pipeline is developed through long-term relationships across the agricultural ecosystem, including producers, agribusinesses, advisors, commodity traders, banks, development institutions and industry specialists.

This sector-focused network enables us to identify financing opportunities that may be overlooked by generalist lenders and to assess each opportunity with a detailed understanding of agricultural production, markets and operating cycles.

Disciplined underwriting

Our underwriting process combines fundamental credit analysis with agriculture-specific due diligence.

We assess:

Historical and forecast cash flows
Funding servicing capacity and downside resilience
Management experience and governance
Commodity and customer concentration
Production history and operational efficiency
Water availability and infrastructure
Climate, biological and geographic risks
Offtake agreements and routes to market
Collateral value and enforceability
Regulatory, environmental and social considerations

We structure each investment to ensure that risk is appropriately allocated, monitored and compensated.

Active portfolio management

Our involvement continues throughout the life of each investment.

We maintain regular engagement with borrowers, monitor financial and operational performance, track covenant compliance and assess emerging risks. This active approach enables us to identify issues early and work constructively with management teams to protect capital and support sustainable business performance.

Risk management

Our risk management process is multi-layered and robust, designed to protect investor capital at every stage.

Underwriting:

Conservative project selection: we only select projects with industry best practices, backed by established offtakers. We use conservative funding servicing assumptions and detailed modelling and stress testing analysis for price, weather and other stress factor assumptions.
Collateral: all our funding is secured with maximum 70% loan-to-value (LTV). Beyond the project's own assets, we take additional collateral from the project sponsor, which may include property, equipment or receivables. Where appropriate, we also consider crop insurance, hedging arrangements, offtake contracts, guarantees, reserve accounts and other credit enhancements.
Diversification: our portfolios are constructed to be uncorrelated across geographic locations, seasonality, agricultural sub-sectors, and stages of the production cycle. This systematic approach reduces risk and ensures stable, risk-adjusted returns.

Management:

Monitoring: we have automated financial information requests and monitoring systems, allowing us to receive our client operational data in a structured and timely manner.
Site Visits: we have boots on the ground and we regularly visit our client production facilities, even in remote rural areas, to follow their progress and maintain strong relationships.

Financial Structuring:

Structural Subordination: Agrarius has issued unlisted notes, which are structurally subordinated to the listed notes and provide additional first loss buffer for listed noteholders.
Profit Spread: a healthy margin is maintained between the returns from underlying transactions and the profit paid to noteholders. A portion of this spread is retained as a first loss tranche.
Securitisation Techniques: performance fees are kept within the structure to align the interests of the administrator with those of the noteholders, creating another layer of protection.

Sustainability and Impact

We believe that responsible agricultural investment can deliver both financial returns and measurable economic and environmental benefits. We favour investments that contribute to:

Food security and agricultural productivity
Employment and skills development
Inclusive ownership and participation
Improved water and energy efficiency
Climate adaptation and operational resilience
Reduced waste and greater value addition
Responsible land, labour and environmental practices

Environmental, social and governance considerations are integrated into our origination, due-diligence, approval and monitoring processes. Our primary mandate remains the delivery of risk-adjusted financial returns, with impact achieved through disciplined investment in commercially viable agricultural businesses.

Investment proposition

Through specialist sector knowledge, disciplined underwriting, structured downside protection and active portfolio management, we aim to provide investors with:

Attractive contractual income
Lower volatility than agricultural equity exposure
Strong downside protection through security and covenants
Diversification from traditional asset classes
Exposure to the long-term development of Africa’s economy