Agcapita, the Canadian retail farmland fund house, launched its fifth fund last week and expects to attract high net worth and institutional investors for the first time, according to Stephen Johnston, founder of the Calgary-based firm.
Fund V, which is targeting C$20 million ($18 million; €14 million), was initially planned for May but was delayed due to administration delays. It has not yet made any investments.
“We haven’t had institutions invest with us to date,” Johnston told Agri Investor. “Historically we focused on registered plan retail investors. What’s different about institutions is that they want to deploy capital that’s proportional to their size. We have grown substantially over the last 6 years and now have the infrastructure and deal flow in place to deploy amounts in excess of $50 million – $60 million annually. This is a more appealing size for high net worth and institutional investors.”
Johnston also pointed to recent farmland investment activity as partially responsible for increased interest in farmland by institutional investors. “CPPIB [Canada’s largest pension fund] has now invested in farmland, and that has encouraged a jump in interest from institutional-style investors. But we’ve always had an open channel with those people given our acknowledged expertise in the space,” said Johnston.
The fund’s minimum commitments will still remain low at $5,000 and, as with Funds I – IV, Fund V will make buy-and-lease investments into farmland in Saskatchewan province in west Canada.
Owing to restrictions on foreign land ownership in the prairie regions, where the farmland holdings will be located, the fund is open to Canadian investors only.
Agcapita was established in 2007 and fully realised Fund I after selling the whole portfolio for C$19 million to a family office earlier this year. The firm currently manages around C$40 million in Fund II, III and IV, all of which are 100 percent retail funds that have now closed. It does not use a placement agent but markets and distributes its funds through Exempt Market Dealers, Canadian independent financial advisors. The firm works with around five EMDs, according to Johnston.