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Appian Capital, the London-based private equity firm specializing in the mining and metals sector, held the final close of its second fund at a cap of $ 775 million.
The fund, Appian Natural Resources Fund II, follows its predecessor’s strategy of investing in natural resources globally. The vehicle is a step up from the company’s first fund, which closed in 2013 at $ 375 million, and brings the company’s total funds under management to $ 1.2 billion.
The new strategy has been oversubscribed, Appian said, attracting interest from existing and new investors.
However, the successful fundraising comes at a time when the buyout industry is moving further and further away from mining investments – either due to challenges with commodity prices or pressure from institutional investors, who wish to focus. on assets with reduced environmental impact.
Private equity investments in the sector globally fell to $ 500 million in 2019 from $ 2 billion a year earlier, according to a report by law firm Bryan Cave Leighton Paisner released last year. lowest since the company started tracking the space in 2013.
For the moment, the second fund of the firm is deployed at 40%. Its main targets are mid-sized assets, including raw materials used in batteries, electric vehicles and renewable energy systems. The company said it will also invest in precious metals as a potential hedge of the portfolio.
Appian’s portfolio includes recent acquisitions, such as equity investments in the copper-gold development asset of Mineração Vale Verde in Brazil and the Fingerboards mineral sands project of Kalbar Operations in Australia; a royalty investment in the nickel-copper-cobalt operating assets of Atlantic Nickel in Santa Rita, Brazil; and royalty and credit investments in Harte Gold’s production Sugar Zone mine in Ontario, Canada.
Michael Scherb, Founder and CEO of Appian, said the second fund “is well positioned to benefit from its exposure to high-growth segments of the global economy, with commodities that will enable the transition to a low-growth economy. low carbon emissions and infrastructure development ”.
Scherb, a former investment banker JP Morgan Cazenove, founded Appian Capital in 2012. Since then the company has grown to 37 investment professionals in Appian’s offices in London, Toronto, Lima, Belo Horizonte (Brazil ) and Sydney.
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