Fundraising

Conterra develops agri loans business, targets $100m PE first close – exclusive

Conterra Asset Management entered into a joint venture with Farmer Mac to provide fee appraisal services for farmland owners and is targeting a $100m first close of its agribusiness PE fund later this year.

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Conterra Asset Management, an agriculture-focused investment firm, is developing its agriculture asset management business offering loan services and private equity investment opportunities to institutional investors.

This week the Iowa-based firm entered into a joint venture, Contour Valuation Services, with Farmer Mac, the agricultural lender, to establish a fee appraisal services for farmland and agribusiness owners in the US.

The firm is also raising an institutional private equity fund to invest into a range of agricultural businesses in rural areas. The fund is targeting a $100 million first close within the next six to eight months and there are already three US-based investors in the fund. A total target has not been set. The fund will invest across sectors including manufacturing, distribution or agtech.

Conterra counts private equity firms, pension funds, insurance companies or “any institution that has agri assets on its balance sheet, debt or equity” among its clients, according to Paul Erickson, president and chief executive of the firm.

The appraisal service, Contour, could be useful to farmland fund managers that use debt in their portfolios, according to Erickson. Farmland Partners, the NYSE-listed real estate investment trust (REIT), raised $20.7 million in debt from Farmer Mac in August 2014 and Gladstone Land, another listed REIT, has also acquired debt from Farmer Mac in the past.

“This joint venture further supports Conterra’s goal of providing a full suite of products and services to agricultural lenders. Readily available, high-quality real estate appraisals are of significant importance in agricultural lending as lenders strive to meet the expectations of their customers,” Erickson said in a statement.

Conterra is using Stonehenge Partners as a placement agent for the fund which has a three-year deployment period. The company has over $1.8 billion in assets under management and most of its clients are US-based.