Bonnefield Fund IV holds first close

Canadian farmland investment manager Bonnefield Financial has held a first close on Bonnefield Canadian Farmland Fund IV, including a C$60 million ($45.90 million; €41.11 million) commitment from “a Canadian investor”.

It is not clear whether this is the fund’s sole commitment.

The fund will be diversified through assets with different crop-types and farm operators across Canada. The firm says it uses a buy-and-lease strategy and  seeks out innovative farmers which it can help to increase margins and work with to improve properties.

Its predecessor, the C$261 million Bonnefield Canadian Farmland Fund III, held a final close C$61 million over its target in January 2014, according to the firm’s website, and is fully invested. The firm described Fund III as holding the “most valuable and most diversified portfolio of Canadian farmland ever assembled”.

“Fewer than five” Canadian pension funds invested in Fund III, two of them new to the asset class, the firm’s president Tom Eisenhauer, Bonnefield president, told Agri Investor at the time.

Bonnefield is Canada’s largest farmland investment manager, and uses a buy-to-lease investment strategy. It has C$400 million under management, and owns 80,000 acres of farmland on behalf of investors, renting to farmers in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia.

While Fund III was marketed only to institutional investors, the first two funds mainly attracted family offices and high net worth individuals, according to an interview with Eisenhauer in 2014. Reflecting the appetite of the new pension fund investor base, Fund III has a 20-year life whereas the Fund I and Fund II expire after 10 and eight years respectively.

The firm published a paper this year saying cultivated forage crops in Canada such as alfalfa, present a growing opportunity for investors as demand from export markets begins to rise. China and Saudi Arabia were earmarked as two key export markets.