The fund is being launched with initial contributions of €200 million ($221 million) by the bank and €50 million by Atitlan, with the aim of doubling these resources to boost the sector in Europe, the Americas, Africa and Asia.

As the need to produce more food using fewer resources to feed a growing population becomes critical, Spain’s Atitlan, a venture capital firm, and Santander, have just signed an agreement to create Atgro, a global investment platform dedicated to agricultural projects. The private equity fund is being launched with initial contributions of €200 million from the bank and €50 million by Atitlan, and it is expected to attract other investors, with a target of over €500 million.

Atgro will be managed by Elaia, a subsidiary of Atitlan for investment in the agricultural sector; Santander will also become a shareholder under the terms of the agreement. While the bank will not play an active role in investments, it will contribute its broad local knowledge in different geographies and its salesforce, the firm said in a statement. 

From its first olive grove project in 2007, Elaia has expanded its operations to almonds, oranges, tangerines, lemons, grapefruit, avocados and pistachios in Spain, Portugal and Morocco. It has transformed over 20,000 hectares, making it a strong force in the cultivation and management of agricultural processes,.

This partnership between Santander and Atitlan reflects their long-term commitment to the agrifood sector, which is in the midst of transformation with new challenges, such as climate change, demographics and changing consumer habits, are driving the change to a more scalable and sustainable production model

Atgro plans to develop a broad product portfolio (dried fruits and superfruits) with geographical diversity (Europe, the Americas, Africa and Asia). It has kicked off with investments already made by Atitlan in 3,000 hectares of pistachio trees and by Ecosac – Peru’s second largest exporter of grapes – and 5,000 hectares of vineyards, with a turnover of some $200 million. Its growth will be driven by new crops and acquiring assets already in production. Atgro will continue to make investments, with a focus on "superfoods" and a sustainable production model, the firm added.

The fund will be open to institutional and private investors, given the interest in this type of alternative asset with a strong economic and social impact and, at the same time, little connection to traditional financial products.

The intention is for the platform to be classified as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation, with a commitment to promoting environmental initiatives in the investment portfolio.

A number of other firms are also stepping up investment in a sustainable agriculture sector. London-headquartered Cibus Capital, a specialist investment advisory firm which concentrates on sustainable food and agriculture, also invests heavily in a sustainable food and agriculture sector. It is looking, for instance, at nut production – such as almonds and pistachios – in new areas like Northern Spain rather than California. Bees are also under pressure; Alastair Cooper at Cibus Capital is invested in BeeHero, a precision pollination provider for almonds, berries and more. The cellular meat world is another area of opportunity for Cooper. See more commentary here.

Alternative investment in growth segments
Santander's participation in this platform is part of the strategy of the Investment Platforms Unit (IPU), the unit within Santander Asset Management specialising in investment in alternative growth segments – a diversion from the bank's traditional activity, such as direct lending (Tresmares), private equity (Fremman Capital), venture debt (Atempo), Special Situations Lending (Deva Capital) and venture capital (Seaya, São Paulo).