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Why One of Canada’s Largest Pension Funds Chose Allflex as its First Agtech Investment

June 29, 2016

One of Canada’s largest pension funds has made its first investment in the agtech sector. The Public Sector Pension Investment Board (PSP Investments) has invested in Allflex, a global animal intelligence and monitoring systems provider.

PSP Investments has $112 billion of assets under management and manages the pension funds for the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force.

With investments ranging from public and private equity to infrastructure, PSP Investments is no stranger to the agriculture sector, but has focused on the farmland markets of Australia and New Zealand until now.

“PSP Investments is an active investor in agricultural markets with investments in dairy and cattle farm operations in Australia and New Zealand, and as such our team was able to look at the opportunity with good insight into the customer and market dynamics,” Guthrie Steward, senior vice president and global head of private investments at PSP Investments recently told AgFunderNews.

Existing investors and private equity firm BC Partners also joined the round will remain the controlling owner after first investing in 2013.

Allflex, which was founded in New Zealand in 1955, sells electronic identification and monitoring equipment and for all livestock species and companion animals. It designs, produces and distributes a variety of products such as radio-frequency identification (RFID) and visual ear tags, tissue sampling devices, RFID implants, monitoring devices, milk meters, and other farm management equipment.

Its customers represent a diverse array of individuals and companies, including farmers, State regulatory bodies, livestock industries, aquaculture, pet owners.

Allflex was acquired by French company SFII in 1989 and so opens up PSP Investments to the European private equity market and the rapidly growing animal health market, according to PSP’s Steward.

Steward highlighted five specifics of the Allflex deal that made it an attractive investment for PSP.

“Allflex is a well-established global player in the animal health market, with a leading position in the majority of the over 60 countries in which it operates. Second, the demand for its products and services is growing rapidly. Third, Allflex is a leader in bringing new innovative products and services to the market. Also, we are investing alongside an experienced partner with strong conviction about the future—BC Partners. In addition, Allflex has an excellent team with demonstrated experience in expanding the company’s market positioning.”

The animal health company may not be the last agtech play for the Canadian pension fund managers. According to Steward, the company looks for opportunities to invest in companies that have demonstrated success in introducing new technologies or services to growing markets.

“Allflex is a great example of such an innovative company and which we believe, as a result of its focus on innovation, has developed a unique strategic position to continue to bring new benefits to its customers,” added Steward.

As far as an exit strategy goes? Steward says that the fund is a long term investor with plans to hold the investment as long as it meets its investment objectives.

Animal welfare and monitoring technologies have caught some investors attention in 2016. In March, on-farm diagnosis platform Advanced Animal Diagnostics closed a $1.7 million Series D and non-antibiotic mastitis therapy developer EpiBiome closed a $1 million debt financing round last week.

Are you an animal health & nutrition startup? Are you a VC interested in animal health & nutrition technologies? We want to hear from you! Email [email protected] or tweet @lo_manning.

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