Aymeric Jung and Josep Segarra – From Lehman Brothers to rebuilding the food system

A conversation with Aymeric Jung and Josep Segarra of Quadia Capital, an investment manager based in Geneva, Switzerland, who invested over 150 million into impact companies, projects and funds.


Using flexible loans to invest over 10M into regenerative food and agriculture companies in Europe.

Aymeric Jung and Josep Segarra of Quadia Capital (www.quadia.ch) who have been investing in regenerative agriculture and food companies for a few years and put more than 10M to work. We discussed their backgrounds, Aymeric was at Lehman Brothers when it collapsed.

Two barriers for investing in regenerative agriculture according to Aymeric and Josep:

  1. You have to understand that food isn’t a basic product, it is about life, it isn’t a smartphone. You need to regenerate it. It takes time! Price and costs aren’t everything. Quality vs quantity
  2. Long term view. If you think buying high quality food it is too expensive you can reduce your food costs by reducing animal protein.
    Key is externalities, the more they are integrated the easier it is to compete companies with less or positive externalities (which you invested in).

Advice to starting impact investors in regenerative agriculture:

Nouriterre is about finding the comfort zone for traditional investors. To get into the comfort zone of traditional investors you need two things:
1. (some) liquidity
2. investment periods which aren’t too long

4 years 4% annual return and some cashflow after 2 years (25%), after 3 years 50% etc.

Diversification, with half of the program goes to financing indexed loans to provide growth capital to SMEs in regenerative food and agriculture.
Index loans, 3 years or 3.5 years. 
First 1 year no payback 
Every 6 months the company pays back a % of the gross sales
The investor is completely aligned with the company, when the company is successful the investor is and the other way around.

The other 50% is invested in debt funds for food and agriculture in developing countries.

Quadia was mainly investing in renewable energy and energy efficiency and started looking at agriculture because it wastes a huge amount of energy. Agriculture is a 5,5T industry with when you do it right, has a lot of spill over effects.

Blackrock CEO letter, companies have a social role:

Danone, the costs of capital depends on the ESG score
Every CFO Should Know This: ‘The Future Of Banking’ Ties Verified ESG Performance To Cheaper Capital

SlowMoney, which Aymeric brought to France

It is too late for being just sustainable we really need to rebuild the economy regeneratively. It’s a new economy we are building!


Aymeric Jung: So I can start on just to let you know that before working at Quadia, I was walking around 20 years on capital markets and trading room. Mainly on the structuring side. So it was really about looking for solutions. And in 2007, what happened? We had food crises, pricings going out for old the food and more private equity funds came to my desk, to my team to search a solution about buying land and produce food, because it was clear that population growing, pricing going up, it was a key investment ten years ago.

Aymeric Jung: On my side I just found out that having a quantitative solution, which is just producing more food is not sustainable. And it’s a short term view about a solution that we should implement.

Aymeric Jung: And step by step still working at banking, I met a lot of people in both agro ecology, local food, regenerative agriculture. I do think that is the solution and I started to be passionate about quality instead of quantity and logistic instead of just a linear economy where you are producing and then and you waste. And I started to think that we should bring investment to all these new entrepreneurs who are reinventing the food system. That’s what I’m doing now.

Aymeric Jung: And when you relook at what we need today and on what’s going on, a big waste of energy is in the food system, just considering all the oil you can use and need for growing as a food. Then the logistic and transporting food from one place to all around the world is a big waste of energy.

Aymeric Jung: Yeah, of course. So after 2007, I leave 2008 on the banking and I mentioned before I was at Lehman Brothers. So it was really in London at the trading room at my desk, living the crises. So it was not so easy. But.

Koen van Seijen: Wow you were in the first row.

Aymeric Jung: Yeah, exactly. The famous Monday in September.

Aymeric Jung: But for me, it was not really sad, finally, because for one year I was already interested by something else. So I had this passion about how to bring solutions this time not just through derivatives or pricing, but really on the field with these entrepreneurs.

Aymeric Jung: First, you have to know, and I do think you know this when you are talking with people or classical investors or bankers about social and environmental finance or impact investing, you have this thought that it would not be liquid, it would be with a low return or just an emerging market with high risk and sometimes not truly proficient or doing this kind of investment.

Koen van Seijen: More as a hobby.

Aymeric Jung: Yeah. Five years ago, it was really the case.

Aymeric Jung: So what we did with Nouriterre it is just trying to find for investors where is his comfort zone and the comfort zone is not for investing too long and having a clear view on the potential return. So we built this program by bringing diversification for the investors. And the key was investing for four years, targeting a 4 percent annual return. And already some cash flow after two years and three years. So when you invest 100 Nouriterre program is giving you back 25 percent after two years, 70 percent after three years and full redemption after four years. So for a lot of investors, it made sense to have diversification. I would say in real economy and interpose for you. And they knew that the return and the timeline of the return was really clear. So it is what we call the comfort zone of the investors, for them not thinking that it’s too much risky at the beginning.

Koen van Seijen: And that liquidity piece like it’s very unclear in many cases because it’s such a long term transition in the food system when it’s coming back. So tackling that one is absolutely key. And how are you doing that? How do you make sure that after two years or four years already, most of the money or after four years, all of the money plus the return came back?

Josep Segarra: So restructuring in it in a way that we are only investing in debt in this program. So we have more or less half of the portfolio, a little bit more, is allocated in direct loans to young companies normally looking for working capital funding. So in growth phases where of course the banks are our alternative, but they need sometimes quicker capital and also partners that understand the business and the other needs in terms of network and where they are going at. And the rest of the portfolio is actually allocated to debt funds which give this liquidity component, too.

Josep Segarra: And of course, the way we structured the loans and the repayments match the cash flows, how we are going to obtain and reimburse to investors. So the hold back allows us to structure it in a way that capital repayment is possible from year two onwards. So it’s roughly one year period investment and over the four year horizon of the vehicle.

Aymeric Jung: And also specificity we have is we are doing indexed debt, an indexed debt means that you are not discussing an interest rate with an entrepreneur. What you explain it: you just need a risk premium and the entrepreneur must pay back the debt with this risk Premium. For example, could be 20 percent for three years or three years and a half, which is the maximum maturity we are doing for our four years program. And it just means that the entrepreneur is borrowing one hundred at the beginning and for one year there is no cash flow. So he can really grow his company. We don’t need some cash back for the first year.But after one year, every six months, it will pay back a percentage of its gross sales.

Aymeric Jung: So it means if the company is more successful, that what we checked on the business plan instead of three or three point five years, you will be able to redeem after two years and it will be a high return for us. But it’s a high return you are doing thanks to the company’s success, not because you were negotiating at the beginning high interest rate. So by doing this way, a lot of entrepreneurs understand that perhaps the price of capital would be higher, but it’s always cheaper than equity, but could be higher than just interest rates. But they are happy to share this because it’s higher and more successful.

Josep Segarra: It certainly is also a way for us to screen companies to see how they advanced and why not consider an equity investment in the future.

Aymeric Jung: So it’s also a learning curve for our investors, starting with Nouriterre their comfort zone, comfortable program and now ready to go to more private equity deals because they are confident in our expertise and the companies we are bringing for investment.


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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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