Agcapita V targets Q1 final close – exclusive

As Fund IV nears full deployment, Agcapita expects to close Fund V well ahead of its C$20m target.

Agcapita, the Calgary-based farmland investment firm, is expecting to close Agcapita Farmland Fund V on C$40 million ($36 million; €28 million), 200 percent over target, during the first quarter of next year, said founder Stephen Johnson.

Agcapita launched Fund V in July with a C$20 million target and the expectation that institutional investors would form a larger portion of the investor base than previously.

“We’ve had record levels of interest,” Johnson told Agri Investor, adding that funds of funds and local pension funds were placing orders alongside the more common high net worth investor base. “Fund V will be three to four times larger, and it will close in half the time of our previous funds.”

Agcapita’s fourth fund neared full deployment last week after acquiring 2,500 acres of farmland in the Torch River area of Saskatchewan. Fund IV closed on $10 million earlier this year.

The firm currently has $40 million of assets under management between Funds II and IV, all of them buy-and-lease investments. Fund I was fully realised in a $20 million sale in January this year.

Agcapita only targets local investors due to restrictions on land ownership by foreigners but Johnson said it would never expand into the US farmland market to attract more capital.

“We wouldn’t consider the US farmland market,” he said. “Canadian farmland prices are significantly lower than in the States. Key metrics that we look for in any potential deal are low cost per bushel of productivity, low volatility of yield, high gross rental rates coupled with long lease duration and low political risk.  From this perspective the Canadian market is one of the most competitive in the world.”