The International Finance Corporation (IFC) is considering a US$20 million investment in New Hope Agriculture and Food Fund, according to a statement on IFC’s website.
New Hope Agriculture and Food Fund is a private equity fund focused on making equity investments in private companies within the agriculture and food sector in China.
The Fund will be managed by Hosen Capital, which has 23 staff and is led by Alex Zhang and Chris Wang, previously of New Hope Capital, the financial business arm of Chengdu-headquartered New Hope Group.
With annual sales of around US$8.8 billion, New Hope Group is one of the largest agribusiness enterprises in China.
New Hope Agriculture and Food Fund is targeting to raise up to US$180 million. IFC has proposed to make an equity investment of up to US$20 million in the fund, but not exceeding 20% of the total final commitment. IFC says it will not be the single largest investor in the fund.
The fund aims to help grow agricultural and food companies in the rural areas of China. Its other objectives are to increase food safety and supply by increasing efficiency and improve supply chain. The key focus areas are biotech, agricultural equipment, distribution and cold chain.
IFC will share its global agriculture and food sector experience with the fund, as well as improve the environmental and social standards in Chinese agribusiness.
The fund has already one existing investment: a fishing company operating in the Pacific Ocean.
This is the second time IFC and the New Hope Group are working together. Back in 2000, IFC committed to invest US$3.2 million in equity and a US$16 million loan into a joint venture called Chengdu Huarong Chemical Company Ltd. (CHCCL), a special chemical business. The New Hope Group was the main shareholder of CHCCL.
Hosen Capital is headquartered in Beijing, and has offices in Chengdu, Shanghai and Shenzhen.