East African Agriculture Fund LP

East African Agriculture Fund was established in the fall of 2010. The fund seeks impact investment opportunities in Sub-Sahara Africa to promote sustainable agriculture. Emphasis will be focused on small scale farmers in rural parts of East Africa. Due to the scattered nature of these rural farmers, the fund intends to integrate farmer groups operations, help them produce higher yields of consistent quality produce, support farmer groups organize, educate them to produce desired products and help them approach the market with a business vision.

Access to valuable arable farm land will be vital in our effort to create an investment portfolio which will mainly comprise of smallholder agricultural farm land. Existing small scale farms will be consolidated and farmers trained how to implement better farming techniques. In the long run, through acquisition of ample farm land and application of commercial farming operations, economies of scale will be achieved and arable agricultural farm land will appreciate in value.

Our agents will be based within rural farming communities in order to carry out the fund's investment strategy. We believe East African Agricultural land is substantially undervalued and ideal rural locations with valuable farm land will be chosen for the fund's investment portfolio.

Financial description

Presently the fund is seeking investment capital for early stage investments for the portfolio which will comprise of real assets mainly in agricultural farm land. Risk mitigation will be managed by diversifying the portfolio with available sustainable agricultural land across the East African region. By doing so the fund won't be exposed to the unsystematic risk of just one country in the region. The size of the investments made will depend on the amount of capital that the fund is able to raise. There is no set minimum initial capital requirement from potential investors. However, there will be a long holding period for committed capital to allow the fund's management to fully implement our intervention strategy in smallholder rural farming communities where we make acquisitions.
By requiring longer holding periods for investors committed capital, an investment appraisal of prospective farm land will be carried out. The fund's management will determine which projects yield the most risk- adjusted market return over a desired period of time. Then management will estimate the projected smallholder cash inflows and outflows from agriculture activity, at with point then anticipate if the projected returns will out perform or underperform the MSCI Frontier Index market return.