The ongoing liquidity correction within agriculture provides opportunities to partner with top operators through equity and debt investments, according to Tiverton Advisors managing partner David Chattleton.
Speaking to Agri Investor soon after Securities and Exchange Commission filings revealed the firm had raised approximately $60 million across two separate funds, Chattleton said Tiverton presents its investments to farmers as opportunities to “institutionalize” their legacies in agriculture.
“The way we do that is twofold: one is by providing loans to the farming community that bridge a borrower’s current state of affairs – which are challenging given all of the macro factors influencing ag – through the thunderstorm with credit products,” said Chattleton.
“On the equity side, we try to find best-of-breed operators, partner with them and scale their business through a more responsible balance sheet approach, not one that is over-reliant on credit.”
The SEC filings show that the Raleigh-Durham, North Carolina-headquartered firm raised $33.25 million from four investors into the Tiverton AgriFinance II vehicle. A separate filing released on the same day showed the firm also raised $26 million from four investors into its Tiverton Ag Legacy Holdings vehicle.
Tiverton’s loans, said Chattleton, are extended in both real estate and operational deals and generally range between $5 million and $100 million or more. Though the firm has historically tended to focus on the senior loans that remain its preferred approach to credit investments, Tiverton also has experience of extending junior loans in ag.
Chattleton declined to discuss covenants or interest rates for the loans, beyond describing them as “competitive.”
“We have a very proprietary approach that is very farmer-friendly,” he added. “We have had nothing but successful outcomes in all investments to date.”
Though Tiverton views the debt vehicle as its flagship fund and most of the capital it has invested over the past six years has been credit-related, the firm established the equity vehicle to function essentially as a small- to medium-sized agribusiness fund. Those investments often involve an operating focus from the Tiverton management team, according to Chattleton.
“For the first time in six to seven years, we think it’s an interesting time to deploy equity in a very targeted fashion,” he said. “We pick and choose our battles there a lot more carefully.”
Tiverton’s investors have historically included insurance companies, high-net-worth individuals and other unnamed institutions, which Chattleton describes as among leading real assets-focused LPs.
In addition to their contributions to the two funds, commitments from some of these investors are included within the $1 billion in assets the firm manages in other pools of capital and through affiliated entities.
From an investment perspective, Chattleton said, Tiverton’s core competencies are in lending to and operating related to row crops, permanent crops (including berries, grapes and some nuts) dairies and assets that are “close neighbors” to those markets.
The firm’s portfolio companies also include Grower’s Holdings, a Garner, North Carolina-headquartered farm management software provider.
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