Conservation Resources nets $50m towards $500m ag fund goal

Managing director Stavros Koutsantonis says the firm’s first farmland strategy overlaps with its participation in the AIM for Climate collaboration between the US and United Arab Emirates.

Conservation Resource Partners has raised at least $50 million towards the $500 million target for a debut agriculture fund that is its first investment vehicle since rebranding from Conservation Forestry in 2020.

Conservation Resources VI was launched in March 2019 and has secured commitments from 28 investors according to an early August regulatory filing. It shows Conservation Resources is working with Southborough, Massachusetts-headquartered Brighton House Associates as placement agent.

Managing director Stavros Koutsantonis declined to comment on Conservation Resources VI.

The firm operating as Conservation Resources was founded in 2004 and managed $822.5 million for high-net-worth individuals, domestic and foreign pension and profit-sharing plans, family offices and others as of December 2021, according to a March filing. Its strategy combines private equity investments and partnerships with conservation organizations in acquiring forest landscapes, productive farm and pastureland and related ecosystem rights.

After raising about $1 billion across five vehicles to support a timber-focused conservation strategy, the firm hired Koutsantonis – a former Brookfield executive – in early 2019 to lead an expansion into agriculture.  Conservation Resources acknowledged its lack of operating history among risks to its farmland investment strategy in its March filing, highlighting an investment in an agricultural property currently under third-party lease as part of its effort to address that risk.

“We do not have any prior operating history with agriculture properties for our prospective investors to evaluate,” the firm wrote. “While the Sherman Investment is an investment that would otherwise fall within CRP’s agricultural investment strategy, CRP’s clients are not expected to participate in the Sherman Investment (which investment predates any agricultural investment activities by our clients and is expected to serve as a “test case” prior to commencement of the active investing by our agricultural clients).”

Koutsantonis is listed as an officer on a Dallas, Texas-headquartered entity called “Sherman Q Ranch” that was incorporated in 2020 and shares an address with New Hampshire-headquartered Conservation Resources.

AIM-ing for an overlap

In March, Conservation Resources announced it was the first farmland investment group to participate in AIM For Climate, a collaboration between the US and United Arab Emirates that includes an effort to catalyze $4 billion of climate smart agriculture investment by 2025.

Tiers of partnership within the AIM for Climate program include “knowledge partners” offering information sharing as well as “innovation sprint partners” positioned to partner with government and non-government organizations in support of specific innovations.

Conservation Resources is currently participating in AIM for Climate as a knowledge partner within the agroecology focus area that is one of four selected for 2022. Koutsantonis said the firm is in discussions about the possibility of developing an innovation sprint.

“The public/private is necessary because if you think of the lifecycle of agricultural innovation, the government’s role is to light the match,” he said. “Then, the private sector comes in to help fill in the research that develops the innovation and then the private sector also plays a role in getting those new technologies into real world application.”

Koutsantonis declined to discuss how capital related any future AIM for Climate innovation sprint would relate to the firm’s existing investment vehicles. He did clarify that any potential collaboration with the program will happen in the context of Conservation Resources’ sustainability-focused US farmland strategy.

“We look at it as a Venn diagram of ‘This is what AIM for Climate does’, ‘This is what we do’; we think there is a pretty big overlap there,” he said. “We see a multi-billion-dollar opportunity ahead of us to implement this impact-focused strategy of ours.”