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September 01, 2008

Paine & Partners has proved there’s money to be made in agriculture, though the firm advocates a cautious approach

By Ken MacFadyen

Few segments exist in the market today where private equity firms won’t tread. Semiconductors, for example, used to be one of those areas, as the cyclical, capital-intensive nature of the sector tended to scare off PE investors. Today, though, some of the larger semi names, such as Freescale and NXP, are owned by financial sponsors.

Another area PE firms have traditionally avoided is the agriculture sector. There’s a list of reasons sponsors have shied away from the space, but the most often cited explanation is that it’s unpredictable. As, Kevin Schwartz, a partner at Paine & Partners, plainly describes: “Sometimes it rains, sometimes it doesn’t.”

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