Amid Record Heat, Equilibrium Capital Raises $1 Billion For Second Greenhouse Fund - ImpactAlpha

08/07/2021 Amid record heat, Equilibrium Capital raises $1 billion for second greenhouse fund - ImpactAlpha
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July 7, 2021 |
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Amid record heat, Equilibrium

Capital raises
1 of 5 complimentary articles$1 billion for second
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greenhouse fund
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ImpactAlpha Editor
David Bank
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ImpactAlpha, July 7, 2021 – The heat wave made the case more starkly than
could any investment pitch deck.
In their offices in Portland, the team at Equilibrium Capital was putting the
finishing touches on the real assets manager’s second greenhouse agriculture
fund just as the temperature in the Oregon city hit a record-shattering 116
degrees. The Controlled Environment Foods Fund II is itself a record-breaker as
Equilibrium’s first billion-dollar fund.
The northwest heat wave damaged berries and other crops from Oregon
through Canada. “Controlled environment agriculture” mitigates risks not only
of high heat, but of drought, short growing seasons, depleted soils, insect
infestations and more. Practitioners say the high-tech greenhouses use 90%
less water and can be 30 times more productive per acre than outdoor fields.
“Agriculture is ground-zero for climate,” Equilibrium’s Dave Chen told

ImpactAlpha. The recent thermometer-busting temperatures “highlight the fact
that the No. 1 determinant of quality and quantity, the No. 1 disruptor, is the
weather.”
Institutional shift
Fundraising blew past the firm’s initial target of $500 million. The final close of
$1.022 billion is triple the $336 million Equilibrium raised for its first controlled
environment foods fund Subscribeas
in 2019. That fund invested in greenhouse facilities toda
1 of 5 complimentary articles investing and s
well as operators like AppHarvest, Revol Greens, Fresh Farms and Houweling
Group.
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The new fund already has invested in two facilities in the U.S. and a third in
Mexico. Equilibrium is an owner of both the greenhouse facilities and of a stake
in the operating businesses. Equilibrium’s investment thesis is that modern
greenhouses are putting agriculture on tech-driven cost and productivity
curves “shifting agriculture from a fragmented land-centered grower industry
into a scaled produce production infrastructure.
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Investors in the fund include pension funds like the San Francisco Employees
Retirement System and AP4 in Sweden as well as the Development bank of
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Japan and others. (Chen is a regular on ImpactAlpha’s Institutional Shift podcasts,

which is charting the flow of capital from large asset owners like pension and
sovereign-wealth funds and insurance companies.)
“Pensions want this as part of real-assets allocations, inflation-hedge

allocations and, more often than not, assets that fit their sustainability
objectives and climate-change objectives,” Chen said. “There is a palpable step
change in the amount of capital that wants to be deployed.”
Before the heat wave, Chen could point to COVID-related shutdowns that
caused food shortages in Singapore. Many produce buyers are looking to
diversify outside of California to assure supplies of fresh produce as the state
enters yet another cycle of a deepening long-term drought. Utah is exploring
large multi-tenant agriparks, similar to industrial parks, to increase local
production of “high-wire” crops such as tomatoes, peppers and cucumbers.
“If COVID did one thing, it put a face on the word resilience,” Chen says. “In the
next decades, the agriculture industry, globally, will be called on to provide
more food, more safely, of higher quality, with greater diversity, in a more
climate challenged world with a shrinking arable, and more inhospitable,
landscape.”
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April 13, 2021 |
Institutional Shift
Institutional Shift: Charting the flow of capital through dairy waste,
SPACs and the end of externalities
Read More
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08/07/2021 Amid record heat, Equilibrium Capital raises $1 billion for second greenhouse fund - ImpactAlpha

Amid record heat, Equilibrium

“Agriculture is ground-zero for climate,” Equilibrium’s Dave Chen told

“Pensions want this as part of real-assets allocations, inflation-hedge

Photo credit: Getty Images. Photo credit: Poli

Photo by Scott Webb on Unsplash Gangstas to Growers in Atlanta | Photo cre

Photo by Lagos Techie on Un

Catalytic Capital | July 2, 2021 Catalytic Capital | June 29, 2021

For general support and other questions, email us at:

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