Real asset manager, SLM Partners, which specializes in regenerative agriculture and sustainable forestry, has held the final close of SLM Silva Europe Fund at €30 million.
The fund was launched in 2021 with a target of €250 million and with the intent of investing in forestry, orchard crops, and agroforestry in selected EU countries. It is their second European fund but their first move into European agriculture. Since launch, SLM has adapted the strategy to focus exclusively on permanent crops in Spain and Portugal. SLM Head of Impact, Alessia Lenders, told AgriInvestor that the shift in strategy was driven by feedback from LPs, “Investors that are coming at it from a natural capital perspective and don’t have much experience investing in real assets, they were looking for forestry-only vehicles as a first step into the real asset space. And then the more experienced real asset investors who knew exactly what they wanted, they didn’t want a combined forestry and agriculture fund.”
The strategy has a 9 percent net IRR target and has already deployed over €22 million into orchards in the two focus countries, building a diversified portfolio across permanent crops – almonds, walnuts, pistachios and olives – and across microclimates within the Iberian peninsula. Its first acquisitions were in Spain and Portugal in 2022. “We’re very picky,” says Paul McMahon, co-founder and Managing Partner at SLM Partners. “Yes, we want to make an impact, but there has to be a sound financial return as well.” In the Iberian Peninsula, SLM thinks that can have both significant impact and solid returns.
As they continue to build their agriculture portfolio in Iberia, SLM Partners is partnering with leading permanent crop operators that are experienced, well-integrated within their value chains, and committed to adopting regenerative agriculture practices.
“There are better ways to practice agriculture than the conventional ones, and we seek out operators that are ready to put these into practice. They’re proving that regenerative agriculture works, that it delivers environmental outcomes and that it’s profitable. We’re in the business of developing investment strategies to accelerate this change,” says McMahon.
With over $760 million in assets under management, through multiple funds and separate accounts in the USA, Australia and Europe, all with an eye on sustainability and regeneration, the firm has gained significant experience measuring their impact across annual crops, permanent crops, livestock and forestry. Their SLM Silva Europe continues this effort and has set forth clear and measurable impact targets, related to carbon sequestration and biodiversity. The portfolio is committed to converting at least 50% of the properties to organic certification, and to demonstrating that the assets can be net positive for carbon (i.e., sequestering more carbon in trees and soil than emitted through operations). The investment team has tied their carried interest to achieving these impact KPIs.
This has attracted many impact investors, especially fund-of-funds and family offices seeking investment opportunities that combine real nature impact with competitive Real Asset returns. Earlier investors included the ASN Biodiversity Fund, but the latest investor to participate, at the time of final close, was Wire Thrive Fund, a Dutch fund-of-funds that plays a leading role in the impact investing ecosystem.
Ronald Janse, Chief Conscious Capital at Wire Group, explains, “This investment marks the first real asset investment from Wire Group’s second fund-of-funds, the Wire Thrive Fund, and builds on its leading role as a global impact investor in the regenerative space. Wire Group’s commitment will allow SLM to invest into an additional asset on the Iberian Peninsula in line with their strategy of bringing regenerative farming with its benefits for both human and environmental health to the mainstream.”
Learn more about SLM Partners here.
Read more about investing in regenerative agriculture from SLM Partners’ informative white papers.