Africa's Top Hedge Fund Starts Food-Focused Private-Equity

Polar Star Management Ltd., which runs one of the best-performing African and Middle East hedge fund over the past five years, plans to start a private-equity unit that will invest in agriculture to exploit rising demand for food.

The Cape Town-based firm plans to use its own money to buy small farms and processing companies in South Africa this year, then increase efficiency through consolidation and better management, said Murray Derksen, a director at Polar Star. It aims to raise 1.5 billion rand ($115 million) for the fund, which may also buy commodities such as grains, while targeting an internal rate of return of 8 percent to 12 percent, he said.