Locusts may not be the private equity bête noire they once were.
Since 2004 the mere mention of the winged insect has struck fear – or at least mild annoyance – into the heart of private equity professionals everywhere. For those whose PE history is a little hazy, it was Franz Müntefering, of Germany’s social democratic party, who coined the phrase, accusing financial investors of “sucking off substance and let companies die once they have eaten them bare”. The label stuck.
Perhaps, however, it has now finally been put to bed. Many years – and value-creation stories – have passed since then (see this month’s Operational Excellence Awards for the latest crop). One firm has definitely not let the insect’s reputation get in the way of a potential value-creation opportunity.
Aqua-Spark, an investment fund focused on sustainable aquaculture, teamed up with Dutch responsible investment heavyweight Rabobank to back “leading insect company” Protix, which in September acquired locust-breeder Fair Insects. Financial details were not disclosed.
Insects are exceptionally good at taking “end-of-life” organic waste and extracting valuable nutrients to be reused for animal and human feed. They are, in a very real sense, the turnaround specialists of the animal kingdom and scientists tell us they are vital for the survival of the human race. Perhaps the industry should reclaim the nickname