Big Sky targets $150m for debut fund’s farmland conversion strategy

Big Sky Capital Group is seeking $150 million for its debut farmland fund, which focuses on implementing regenerative agricultural practices on conventionally managed US farmland properties.

Big Sky is registered in Florida and led by Wayne Ebersole, a Fairfield, Montana-based executive with experience in financial management and regenerative agriculture. The firm’s debut fund, Big Sky AG Fund I, had not secured any investors as of a mid-August regulatory filing.

Ebersole told Agri Investor the vehicle targets net 15 percent IRR through the acquisition of between eight and 10 properties to be managed by a group of farm and ranch managers already within his network. He said Big Sky AG Fund I will aim to support conversions that include changes such as integrating livestock, irrigation and fencing on 500-acre to 1,000-acre properties in the Mississippi River watershed states including Iowa, Illinois, Missouri, Nebraska and Kansas.

“We’re looking for those farms that have been conventionally farmed for an extended period of time, where the soil is degraded and maybe heavily eroded. Places where we can buy those properties, make the transition and see the biggest impact the quickest,” he said. “If it’s a farm that’s been farmed in regenerative agriculture for the past 20 years, there’s not a lot of turnaround that can happen.”

In addition to the establishment of Big Sky in September 2022, Ebersole has served since 2015 as financial controller for Future Generation Ag, a role that has included introducing soil health consulting and custom blending of cover crop seed for specific soil types, according to his LinkedIn profile. It shows that since 2004 Ebersole has also served as operations manager at Fairfield, Montana-headquartered consulting firm Emerald Creative Group.

Big Sky AG Fund I’s minimum investment is $100,000 and Ebersole said the fundraising began with a focus on high-net-worth individuals. He explained that the effort to determine the optimal size for Big Sky’s debut ag fund was undertaken together with a broker/dealer he declined to identify, who relayed high levels of demand for sustainability focused investments including farmland.

Ebersole explained that the broker also informed the firm’s strategy to also try and enlist larger institutions as LPs in Big Sky AG Fund I.

“We would like to see the larger institutional investors come in because they are the ones that have some of the biggest interest in making impact investments. The larger family offices, endowments and pensions funds have published commitments to impact investing or ESG, and have set aside dollars for the environment,” he said.

“We had some indications when we first started more than a year ago that it could go quicker but given the environment we have in markets and investments, 24 months is probably being realistic.”

Ebersole acknowledged Big Sky’s farmland effort is small when compared with many other managers active in US farmland markets. He added the firm had intentionally aimed to strike the right balance for an effort he considers to be a “proof of concept” that returns can be made through bringing regenerative practices onto large properties.

“We said can we keep it small enough so that we can really learn and understand the management practices and understand what’s going on, and yet large enough to make a few acquisitions that are decent size and let us do the fix and flip process,” he said. “Big enough to understand what’s really involved, but small enough to hopefully be relatively regional risk and not be on a global scale, per say.”