Pacifico Aquaculture scores funding to expand Mexican striped bass farm to 20,000 MT

Pacifico Aquaculture has scored an investment from U.S. sustainability-driven asset management firm Equilibrium Capital, along with additional funding from majority owner Butterfly Equity, to build a recirculating aquaculture system and expand its nursery and hatchery capacity for its striped bass farm in Ensenada, Mexico.

Founded in 2010, Pacifico produces around 2,000 metric tons of farm-raised striped bass annually and carries Best Aquaculture Practices certification and a Good Alternative rating from the Monterey Bay Aquarium Seafood Watch program.

Equilibrium, which raised more than USD 1 billion (EUR 900 million) in 2021 for its environmental agriculture fund, will provide financing for the entire nursery project. Butterfly Equity, a Los Angeles, California-based private equity firm with USD 4 billion (EUR 3.8 billion) in assets, which acquired a majority holding in Pacifico Aquaculture in 2018 for an undisclosed amount, will provide funding that will allow Billund Aquaculture to construct a recirculating aquaculture system for the nursery. An unnamed U.S. public pension fund and other undisclosed investors have also provided equity commitments to “turbocharge Pacifico’s striped bass production to meet rising global seafood demand,” according to a press release.

“This funding will be used to fully finance Pacifico’s nursery facility in Baja California and provide a substantial runway to scale its production capacity to meet the robust market demand for sustainably raised striped bass,” the funds said in a joint statement. “Thanks to its superior appearance, flavor and texture, striped bass has become America’s most popular wild catch fish but has limited availability due to overfishing, quota constraints and seasonality. By providing its sustainably raised striped bass to customers year-round, Pacifico offers a highly versatile product beloved by Michelin star chefs, restauranteurs and retailers across North America, and is well-positioned for significant market expansion.

Pacifico’s ocean-raised striped bass is sold as Pacifico Striped Bass in the U.S. via retailers, restaurants, and direct-to-retail partnerships. The company was named “Supplier of the Year” by Whole Foods in 2020 and hired former Mowi executive Per-Roar Gjerde as CEO in 2021.

“We are thrilled to partner with Equilibrium and to receive continued support from Butterfly as Pacifico reaches an exciting inflection point in its growth,” Gjerde said. “This investment will allow us to build a state-of-the-art nursery facility and unlock 20,000 metric tons of annual production capacity to meet the world’s growing demand for healthy, nutritious seafood.”

Equilibrium’s Controlled Environment Foods Managing Director Nick Houshower called Pacifico Aquaculture “a trailblazer in sustainable aquaculture” and said his firm was excited to provide funding to allow it to take its production capabilities “to new heights.”

“Next-generation aquaculture is part of the ‘infrastructuring of agriculture,’ where investments in controlled environment facilities to improve efficiencies and resiliency are becoming essential,” Houshower said. “These are the same trends that have informed Equilibrium’s Controlled Environment Foods strategy focused on climate-resilient infrastructure, and Equilibrium is excited to be expanding into a new segment of the CEA sector with Butterfly, a food investing leader.”

Butterfly Co-Founder and Co-CEO Dustin Beck said the investment will allow for the creation of the first commercial-scale RAS facility integrated into a striped bass farm.

“This is a watershed moment for growing sustainable aquaculture in North America,” Beck said. “Butterfly has been a long-term, committed partner to Pacifico since 2017. We have witnessed Pacifico’s tremendous growth since our investment, and firmly believe we’re still in the early innings of its growth trajectory. We cannot be more excited to partner with Equilibrium, who shares our vision to build Pacifico into a world-class aquaculture platform under Per-Roar’s strong leadership.”

Butterfly Equity CFO and Managing Director Peter Tang said using RAS for juvenile production and increasing their size before ocean grow-out is “a tested strategy among developed, at-scale farms.”

“Its application can reduce fish mortalities from disease and predation, improve feed conversion, and enhance profitability and ocean sustainability,” he said.

New York City, U.S.A.-based Peritus Capital, which was founded in 2020 as an aquaculture-focused investment firm, served as lead arranger and financial advisor to Pacifico Aquaculture in its financing agreement with Equilibrium Capital. Terms of the transaction were not disclosed.

"We're very proud to have supported the wonderful teams at Pacifico, Equilibrium, and Butterfly Equity,” Peritus Capital CEO Howard Tang said. “The capital markets have been challenging, but Pacifico is a stellar company. We're delighted that Equilibrium sees its full potential.”

Photo courtesy of Pacifico Aquaculture