Cordillera Investment Partners plans to invest as much as 30 percent of its recently-closed $197 million maiden fund into agriculture, Agri Investor has learned.
Cordillera Investment Fund I’s agri focus will be on the development or acquisition of permanent crops, but the firm will also consider opportunities relating to food production, processing, and livestock.
“We look for areas that remain inefficient, misunderstood, and that are not already overcrowded with institutional capital [and] believe that specifics areas of agriculture, water, and food fit this profile,” Gus Araya, one of three partners with the firm, told Agri Investor.
“Another key area of interest is water,” he added. “In many cases, surface water rights and groundwater are an integral component of an agricultural investment, but we are also looking at pure-play water opportunities such as water rights and water storage.”
While there is no pre-set target on the allocation to agri, Cordillera anticipates that it may be in the range of 15-30 percent of the fund, Araya said, which would approach $60 million.
Agri Investor understands that the 10-year (plus extensions) private equity fund will target a net internal rate of return (IRR) of 15-20 percent across roughly 16 total investments ranging between $5-$20 million each, with the potential to scale up with LP co-investments.
Cordillera announced the $197 million fund’s close earlier this month, drawing commitments from endowments, foundations, family offices, and wealth advisors and bringing the firm’s AUM to $225 million.
“We are able to invest through a variety of structures including working directly with operators, forming joint-ventures, co-investing, or investing in specialized funds,” Araya said. “While most of the opportunities we look at are in North America, we also target opportunities abroad.”
Cordillera specializes a range of “niche and uncorrelated opportunities” in areas that remain “inefficient, misunderstood, and not over-capitalized.”
The firm has completed previous investments in permanent crops and water rights in addition to music royalties, international arbitration, boat marinas, broadband spectrum licenses, and commercial litigation finance.
Araya co-founded the firm in 2014 with Chris Heller, and Ashley Marks, who have spent their careers investing in alternative assets while at Makena Capital Management, the Stanford University endowment, and The William and Flora Hewlett Foundation.