Investment approach

Introduction

The converging sustainability issues of today – peak oil, climate change, chemical residue, destruction of ecosystems, food safety, localism, health and nutrition – are driving fundamental shifts in producer and consumer behaviour, in particular with regard to our food. In this sector, farmers, retailers and consumers are becoming more and more convinced of the need to build a sustainable value chain. A chain in which production, distribution and consumption of food strike a balance between the environment, the earth’s natural resources and the needs of all people on this planet, now and in the future.

The organic food and beverages market in Europe has grown steadily over the past few years. This growth reflects an increasing desire of consumers to purchase more sustainable products, in line with high environmental and ethical values.

In the context of a strongly growing market, many of the pioneering companies in this sector have grown and matured into sector leaders. As these companies encounter growth opportunities or face owner succession issues, Triodos Organic Growth Fund aims to respond to their particular need for a long-term oriented and mission-aligned investment partner that can provide capital and add value to the further development of the Investees’ businesses within the context of its mission-based ‘People, Planet and Profit’ approach.

Mission

Triodos Investment Management sees the need and the opportunity to support those businesses that play an important part in the transition towards a sustainable lifestyle and economy. European organic and sustainable consumer businesses are growing and reaching maturity stages in their development. The capital markets, however, are imperfect on mission-aligned capital beyond the angel- and venture investment stages and are mostly characterized by a short-term focus that does not fit the long-term focus and mission of these companies. As a result, they run the risk of being limited in their growth, and hence the transition to a sustainable economy will be slowed down.

Triodos Organic Growth Fund, established in January 2014 as a sub-fund of Triodos SICAV II, aims to fill this gap. The fund offers investors the opportunity to participate in the growth and momentum of the sustainable consumer sector in Europe. The fund takes significant minority or majority positions in mature, privately-owned sustainable consumer businesses. It aims to deliver a positive social and environmental impact by contributing to the long-term development of these values-driven companies and a transition to a sustainable economy. With this fund, Triodos Investment Management is pioneering a new model for impact investing: mission-aligned private equity with a long-term focus, not driven by exits.

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