Overland Park, Kansas-based Espenmiller joined Conterra this month and will report to president and chief executive Paul Erickson in a position focused on business development and strategy.
Espenmiller told Agri Investor that his new role will focus on building out Conterra’s capacity to directly originate agricultural loans. He explained that Conterra – which began with a focus on servicing Farmer Mac loans – started taking steps to originate more loans directly after the two sides agreed to a buy-out of loans it was servicing for the Farm Credit System affiliate last year.
He declined to share any details about the terms or sector focus of loans Conterra plans to extend to US producers. Espenmiller did highlight how recent market volatility and rising interest rates have sharpened agricultural producers’ focus on strong lending relationships.
“We’ve been on a good run in ag; we really haven’t had a deep cycle. I’m not sitting here forecasting one to come, but it’s never been more expensive to grow a crop or a tree,” he said. “The lender you choose plays a big role in how you formulate your team.”
Conterra generally partners directly with insurance companies and other institutions interested in exposure to ag credit, estimating a volume of loans that realistically can be originated for each investor in a given period, Espenmiller said. He declined to share specifics of such agreements, aside from explaining each lending strategy is tailored to individual investors’ goals and risk appetite.
“It’s a little looser structure than a closed-end fund, so it’s very much relationship-based,” he said.
Conterra’s announcement of Espenmiller’s hire included reference to his experience in farmland equity investing, but he said the firm does not have plans for an equity investment fund.
The firm described Espenmiller as having 24 years of experience in ag finance, most recently serving as Midwest president for Oak River Farms, a Kansas-headquartered firm among investment vehicles affiliated with Bill Gates-backed Cottonwood Ag Management.
Espenmilller’s LinkedIn profile shows that prior to joining Oak River in April 2019, he spent eight years at MetLife that culminated in a role as regional director of agricultural finance. Previously, he served three years as an executive vice-president with Des Moines, Iowa-headquartered First American Bank.
Espenmiller said the past three years focused on equity farmland investments with Oak River has confirmed some of the most important lessons about ag he learned over the course of his previous career on the lending side. Oak River owns and manages farmland properties across 16 states, with the highest concentration of acres located in states including Louisiana, Arkansas, Kansas and Washington.
“Especially in ag, it’s easy to get comfortable across multiple regions, if you are not careful. It’s never been more clear to me that if you don’t have good people on the ground – either who are working for you, or are trusted advisers – it’s really easy to make bad decisions,” he said. “That was my view during the tail-end of my time on debt [with MetLife] and the past there years [with Oak River] have just really driven that point home.”