Strategic Long-Term Investment Methods for Food System Transformation
**Triodos Organic Growth Fund: Empowering Sustainable Food Transition in Europe**
Triodos Organic Growth Fund, a European impact investment fund, has been making strides in the food sector since its inception in 2014. While the term "Triodos Organic Growth Fund" may not be explicitly mentioned in Triodos Bank's recent reports or fund literature, the bank's approach to organic growth and impact investing aligns with the principles of such a fund.
Triodos Bank's strategy revolves around funding organic growth through profit retention, serving the long-term interests of all stakeholders. This approach supports sustainable and responsible business practices rather than aggressive external funding.
The Organic Growth Fund, as part of Triodos Bank's broader strategy, has invested in 12 companies across eight countries, amounting to around €60 million. Currently, the fund has 10 holdings with a value of €45 million.
The fund is managed by a team of four seasoned professionals, with Isabelle Laurencin as fund manager. Before each new investment, the investment team agrees certain impact Key Performance Indicators (KPIs) with the company to be reported annually.
The fund's investment themes include organic and sustainable food companies, fair chain solutions, the shift to sustainable diets including the plant-based movement, and waste solutions and the circular economy. The portfolio boasts a balanced mixture of fast growth disruptive scale-ups and more mature, still-growing companies.
In August 2020, the Triodos Organic Growth Fund became a minority shareholder in the Swiss company Farmy, an online sustainable groceries platform. The fund invites new capital from existing and new investors to expand activities and impact. Typically, the fund takes investments of €2 to €9 million with a minimum ticket size for investment of €250k.
Triodos Organic Growth Fund targets an Internal Rate of Return (IRR) of eight percent net of costs. Unlike traditional private equity and venture capital approaches, the fund does not have a hurdle rate for returns and applies a non-exit driven investment approach. The fund supports buy-ins and hiring processes for new CEOs.
The fund operates under a flat management fee of 2 percent. Success is measured by the growth of the fund, which increases its impact. The fund has a balanced mix of institutional and qualified private investors.
Triodos Organic Growth Fund is a European fund that applies a patient capital approach to supporting the food transition. The fund publishes an annual online impact report presenting impact on a company and portfolio level. Despite not being a dedicated product for the food transition, Triodos Bank's approach to organic growth and impact investing plays a significant role in fostering sustainable development in the food sector.
Triodos Organic Growth Fund's investments extend beyond organic and sustainable food companies, as they also support education and self-development through their funding of fair chain solutions, which aim to improve the living and working conditions of smallholders and farmers. Additionally, the fund shows its commitment to a holistic approach to sustainable development by considering sports as an essential aspect of a balanced and healthy lifestyle, with some of their portfolio companies offering organic sports nutrition products.
