At XP, BRL 500 million for the first retail agro private equity

In a world of food inflation, Brazil is always remembered as the great country capable of supplying the global population, mitigating the risk of shortages. Despite this, agro has never been a popular sector among retail investors, but XP wants to change that story.

After becoming a benchmark in debt and equity issues in the agro world, leading to the offering of Boa Safra (one of the rare successful IPOs of the last season) and most of the independent Fiagros, XP coordinated the offering of a third private fund Aqua Capital’s agro equity.

It was the first time that retail investors had access to an alternative vehicle dedicated to agri. The total funding of the Aqua fund, which aims at US$ 400 million, is still in progress, but the retail offering has already been concluded, raising R$ 501.7 million with 7,200 individuals.

“Brazil is an agro country, but you see little offer linked to this thesis and customers want it”, said Leon Goldberg, partner and responsible for investment funds at XP, in a conversation with Pipeline.

To raise funds for Aqua Capital, Goldberg and the XP executives who led the distribution relied on the renewed appetite of investors for agribusiness — the surge in commodities exposed the sector’s relevance — and on the private manager’s track record of profitability. equity founded in Brazil by the Argentine Sebastian Popik.

In the second fund, a US$ 370 million vehicle still in the investment phase, the manager has already achieved an internal rate of return (IRR) of 36% per year, multiplying the fund’s capital by almost five times, said Fabiano Cintra, partner and responsible for XP’s investment fund partnerships area.

With R$ 3 billion under management (about US$ 650 million), Aqua has already raised two funds since it was founded and invested in companies such as Agrogalaxy, Grand Cru and Biotrop, always exploring the agro thesis beyond the farm gates. — retail assets, such as input and logistics resellers, are part of the portfolio.

With the funding, XP bets on the democratization of alternative investments, a class that until recently was restricted to ultra high-net-worth customers. At the Aqua fund, the investment platform not only attracted 7,200 people, but also offered a more affordable average ticket — R$25,000. On average, investors put in R$ 65 thousand.

The Aqua fund is also born connected to the tool recently created by XP to trade shares of alternative investments in the secondary market, a liquidity alternative that provides comfort to an investor profile that is not yet used to the extended terms of this type of fund.

Considering the Aqua fund, XP has already made 35 offers of alternative investment funds for retail, attracting 50,000 customers. In terms of number of shareholders, the largest vehicle of this wave was a fund of funds that raised R$ 1.2 billion with 10,600 investors. “We are the largest illiquid investment platform for individuals in Brazil”, says Goldberg.

Source: Value Pipeline