AgIS Capital, a spin-off from Hancock Agricultural Investment Group (HAIG), has made an investment into California Olive Ranch, an olive grower and producer of extra virgin olive oil, on the behalf of an institutional investor.
The investment capital, which was undisclosed, will go towards expanding the brand’s assets including the purchase of additional olive groves.
The private institutional investor has a separate account with AgIS and did not want to be disclosed.
AgIS’s president and founder, Jeffrey Conrad, believes there are great opportunities to be found in combining farmland investments with private equity – AgIS’ investment strategy.
“Every deal we do will have a farmland component, but quite often we go beyond the farmgate into the operating company,” he told Agri Investor. “There are real synergies and value to doing both in one transaction especially as some major farmland investors are uncomfortable investing in PE and most PE mangers are scared to death of owning farmland.”
Conrad compared this approach to real estate agriculture, or buy-and-lease, where he considers investors are “price-takers”. “We want to use capital to solve problems, not be a price-taker,” he said.
Investing into already established operating companies is slightly different to other own-and-operate investment models where investors buy land and operate it themselves because the latter often involves developing new operations.
AgIS is unlikely to ever launch a fund and will most likely stick to the separately managed accounts business, according to Conrad. It makes investments within a $50 million to $100 million range.
Conrad established HAIG, a division of Hancock Natural Resources Group and subsidiary of Manulife Financial Corp, in 1990. He left in 2011 and, after considering retirement, decided to launch AgIS bringing across ex-colleagues from HAIG.
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