Conservation Resource Partners seeks $500m for ag strategy

The historically timber-focused firm hired former Brookfield Asset Management director Stavros Koutsantonis this year as part of its expansion into conservation-focused agricultural investments.

Conservation Resource Partners is seeking $500 million for its sixth fund, according to a regulatory filing shown last week.

The firm formerly known as Conservation Forestry will seek investments of at least $5 million for Conservation Resource Capital VI. It has also retained Brattle Advisors, a Boston-based placement agent, the filing shows.

In January, the Exeter, New Hampshire-headquartered firm announced it had appointed Stavros Koutsantonis as managing director of its new Conservation Farming division. Koutsantonis was previously a portfolio manager and head of natural resources and opportunistic strategies at Brookfield Asset Management.

A source familiar with its strategy told Agri Investor that since its founding in 2004, Conservation Resources had raised and invested about $1 billion in a strategy focused on pairing timber investments with capital devoted to conservation efforts.

Feedback from existing investors played a role in the firm’s decision to broaden its strategy beyond timber, the source said, but it was conservation groups that were more vocal about the need for such a vehicle focused on agriculture.

“On the private equity side, no one had concertedly come in with a specific strategy like this, to work in agriculture with conservation and help them with their goals,” the source said. “It is the view of Conservation that we are doing a great job in being able to feed the world, but there are some unintended consequences of intensive agriculture that can be mitigated.”

Conservation Resources’ agricultural strategy will be distinct from its timber investments and target both row and permanent crop assets opportunistically across the US, according to the source. The firm expects to begin investing from the vehicle this year.

Family offices have traditionally been the focus of Conservation Resources’ domestic fundraising efforts, the source said, adding that for Fund VI the firm plans to increase its outreach to public and private pensions in the US and Europe.

While the firm has counted US public pensions – including the $12.9 billion New Mexico Educational Retirement Board – among LPs in its past vehicles, European institutions have demonstrated more appetite for the firm’s conservation-minded approach, though domestic interest is growing, the source said.

As part of its effort to determine the feasibility of a conservation-focused agriculture strategy, Conservation Resources structured a deal that involved an acquisition of a Midwest grazing ranch containing endangered species habitat, selling a conservation easement on the property and then entering into a management plan in co-operation with state agencies.

Though that transaction was ultimately not carried out, the source said, Conservation Resources has received indications of significant interest in agricultural property-focused conservation easements and other private sector approaches to conservation. According to the source, capital for such investments are likely to come from foundations, non-governmental organizations, philanthropies and state-linked bodies, with water issues frequently of particular interest.