Bonnefield creates open-ended farmland vehicle

Bonnefield plans to take the fund to market annually, targeting low double digit returns for high net worth and family offices through investments in Canadian farmland.

Bonnefield Financial has established an open-ended farmland fund for private investors in Canada, reaching an unspecified first close in January after receiving commitments from new and existing investors.

The Bonnefield Canadian Farmland Evergreen fund was formed by combining the assets of two previous closed-end farmland funds managed by Bonnefield, LP I and LP II, established in 2010 and 2013, respectively.

Tom Eisenhauer, chief executive officer with the Canadian farmland investment manager, told Agri Investor that the Bonnefield Canadian Farmland Evergreen fund was formed in response to demand from investors in the closed-end vehicles who were interested in longer-term exposure to Canadian farmland.

The new fund, which has a net asset value of C$80 million ($59.48 million; €55.92 million), will continue to target commitments from high-net-worth individuals and family offices. The minimum investment requirement is C$250,000, while the average investor has committed about C$1 million thus far, Eisenhauer said.

He added that farmland investments from the fund are likely to range between C$3 million and C$5 million.

“Our view is that this will be a permanent fund that will grow slowly and gradually over time,” he said. “Our approach is to partner with farmers who are trying to expand their operations, plan for succession and retire. From them we have seen overwhelming demand.”

The fund currently contains a portfolio of 46,000 acres of property originally owned by Funds I and II and will primarily follow a row-crop focused strategy with some exposure to permanent plantings including apples, as well as trees and shrubs used for landscaping.

Bonnefield expects the Evergreen fund to produce returns in the high single-digit to low double-digit range, Eisenhauer said.

Established in 2009, Bonnefield is the largest farmland management and investment company in Canada. The firm mostly employs non-leveraged sale leasebacks and has more than 70 tenant farmers maintaining a portfolio of more than 80,000 acres spread across Canada.

In addition to the private wealth-focused vehicles discussed above, the firm also has two vehicles for institutional investors. Bonnefield Canadian Farmland Fund III surpassed its C$200 million target to close on C$261 million in early 2014 and is now fully invested. The fourth fund in the series held a first close on C$60 million in August and is understood to have a target similar to its predecessor’s.