Farmland Partners acquires Murray Wise Associates

Westchester Group founder Murray Wise describes a ‘deal made in heaven’, which FPI hopes will make it a more attractive partner to a wider array of farmland investors and operators.

An Illinois-headquartered farmland manager led by Westchester Group founder Murray Wise has been acquired by Farmland Partners Inc for $5 million in cash and $3 million in stock.

The purchase of Murray Wise Associates adds 16,700 acres of mostly US Midwest farmland to FPI’s approximately 175,000-acre portfolio.

The pair also announced plans to establish a joint asset management platform to expand MWA’s existing farmland brokerage, management and auction services. The terms of FPI’s acquisition include incentive compensations of up to $3 million in stock if MWA reaches undisclosed AUM objectives within three years.

Wise, who will continue as chief executive of MWA and has joined FPI’s board, told Agri Investor he has known FPI chief executive Paul Pittman for years and ultimately decided to sell in mid-2020 after multiple approaches. MWA will continue to operate independently, while helping FPI acquire and manage properties, he explained.

“It’s quite frankly – so far – been a deal made in heaven,” said Wise, whose career has included management of more than $1 billion of farmland assets in the US, Australia and South America.

“[FPI CEO] Paul [Pittman] leaves us totally and completely alone and tells us to just continue doing the things we’ve been doing in the past and find Farmland Partners a little land as we go along. That’s what we’ve been doing and it’s been a pretty enjoyable relationship.”

Pittman said in a statement he first met Wise – who he referred to as the “father of farmland investing” – in his late 20s after reading one of Wise’s books on investment. The acquisition of MWA, he added, will make FPI a more attractive partner to a wider array of farm operators and investors, while delivering value to existing shareholders.

“The acquisition of MWA will allow us to grow our assets under management at times when we are not comfortable raising public equity, increasing fee income while leveraging our existing deal sourcing and farm management infrastructure,” FPI president Luca Fabbri added.

MWA was founded in 2010 following Wise’s sale of Westchester to TIAA. It maintains offices in Clarion, Iowa and Naples, Florida, in addition to an Illinois headquarters.

Wise described many changes that have occurred over his decades in farmland market, which began when he purchased his first property at the age of 17. Among the most important, he said, has been the overall decline of return expectations across asset classes and the more active role played by large producers in farmland markets.

In the years since 2017 especially, added Wise, farmland investment by family offices has increased significantly and come to account for about a 20 percent of institutional activity, he estimated.

“It’s really hard to know who’s bought what, but there are a small handful of basically family offices or private individuals who have acquired a very substantial amount of land in the last three to five years and will continue to acquire a lot of land,” said Wise. “They understand the appreciation aspect of farmland and are not going to demand the same annual rate of return that some of the [investment] groups would need for their portfolios.”

Current investor demand for farmland remains high, said Wise, who highlighted recent attention to inflation as a key driver of interest.

“I have been predicting significant appreciation since about 2008 or 2009. I’ve basically been wrong. Yes, 2011 and 2012 were pretty good, but the element of appreciation in farmland has not occurred greatly until about the past 24 months,” he said. “It’s just in the last – not year, but 60 days – that inflation has become a key word in all conversations, because people see it happening.”