Paine Schwartz raising $1.2 bln fund for food, agribusiness

Paine Schwartz Partners is targeting $1.2 billion for its fifth fund, which will invest in food and agribusiness companies, a fund presentation delivered to Rhode Island State Investment Commission shows.

Paine Schwartz, formerly Paine & Partners, evolved into a food-and-agribusiness specialist over its previous three funds, according to the presentation.

Roughly a third of the capital deployed through its second fund, a $1 billion 2000 vintage, was used for deals in those specific sectors. Paine Schwartz’s fourth fund has invested all its capital in food and agribusiness.

Paine Schwartz closed its previous fund on $893 million in 2015. Fund IV was netting a 7 percent IRR and 1.1x multiple as of March 31, 2018.

The fund’s largest investment, $92 million in food-safety company Global ID Group, was generating a 28 percent IRR and 1.4x multiple as of that date.

Paine Schwartz’s 16 investments in food and agribusiness companies were grossing a 36 percent IRR and 1.8x multiple since the firm’s inception, according to the presentation. Five realized investments have been even more successful, grossing a 90 percent IRR and 2.6x multiple.

The firm is charging investors a 2 percent management fee on committed capital during Fund V’s investment period. The fee falls to 2 percent of invested capital thereafter.

Paine Schwartz will take 20 percent of the fund’s profits as carried interest over an 8 percent preferred return. The GP’s commitment to Fund V will represent at least 2 percent of the fund’s capital.

The firm is led by Chairman and Founding Partner Dexter Paine, CEO Kevin Schwartz and Partners David Buckeridge and Angelos Dassios.

Rhode Island committed up to $50 million to the fund, spokesman Evan England wrote in an email.

Paine Schwartz declined comment.

Action Item: For the Paine Schwartz presentation, visit https://bit.ly/2J6PzcE