AgIS launches open-ended farmland fund

The AgIS Farmland Club Fund will target gross IRR of 8-12% though up to 10 investments focused on permanent crops.

AgIS Capital has launched an open-ended vehicle focusing on operated permanent crop farmland and related processing equipment.

The records custodian for the $15.7 billion Public Employees Retirement Association of New Mexico told Agri Investor that its chief investment officer had accepted an initial proposal for a $150 million commitment to the fund presented in February. The proposal is undergoing review before funding.

A representative for the $42.9 billion Colorado Public Employees Retirement Association, which reportedly also made a $150 million commitment to the fund, declined to comment on “deals that are not closed.”

“The fund will target a 8-12 percent gross IRR, with an anticipated 8-10 investments over their five-year investment period,” wrote NM PERA staff in materials from the February presentation provided to Agri Investor.

“Anticipated crop types will include almonds, pistachios, pecans, wine grapes, apples, walnuts, olives and other permanent crop commodities as well as related operations such as processing, packing and marketing.”

According to meeting materials, AgIS plans to deploy capital from the Farmland Club Fund  to acquire both development and re-development permanent crop properties where the latest irrigation infrastructure, tree or vine varieties and orchard design techniques can be deployed.

Founded in 2013 by former Hancock Agricultural Investment Group executives, AgIS had previously focused on managing separate accounts for institutional investors, including a $150 million investment by the $82.3 billion Virginia Retirement System and $100 million account managed for the $18.7 billion Teachers’ Retirement System of Louisiana.

A performance review of AgIS’s separately-managed accounts platform was among information redacted from NM PERA materials prior to their release.

According to a due diligence timeline contained within the materials, NM PERA determined in late 2015 that farmland would help diversify its real asset portfolio away from energy.

After an introductory call with NM PERA staff and investment consultants Albourne in April 2019, PERA made an on-site visit to AgIS’s Boston headquarters in July 2019, after which began a negotiation on terms and fund structure that was completed in January.

“The AgIS team and pedigree, paired with the ability to scale capital between like-minded institutional investors, creates a unique edge when considering deployment of capital in this highly fragmented market,” wrote NM PERA staff. “The ability to participate in the seeding of a newly-created fund opportunity presents the potential for strong term negotiations; resulting in significant financial and governance mechanisms that will drive a strong portfolio result in the future.”

AgIS declined to comment.