Homestead closes second farmland fund on $400m

Homestead Capital has closed its second farmland fund on more than double the size of its predecessor.

The firm announced Monday that it has closed its Homestead Capital USA Farmland Fund II on its hard-cap of $400 million, surpassing its target of $350 million.

“With capital from Fund II, we plan to continue to execute on our value-add investment strategy. Because of our local presence and broad agricultural network, we are seeing many attractive investment opportunities in our targeted regions,” Homestead co-founder and portfolio manager Dan Little said in the statement.

Homestead will continue to focus on the Mountain West, Pacific, Midwest and Delta regions of the US, according to the statement.

A regulatory filing last month showed that Fund II had secured commitments from 24 investors as of 7 October. Investments in Farmland Fund II are known to include a $50 million commitment from the Maine Public Employees Retirement System and a $100 million investment from the Washington State Investment Board.

The previous fund in the series, Homestead Capital USA Farmland Fund I, closed on $173 million in July 2015. Investors in that fund included the Texas Teachers Retirement System, the University of Alabama and FLAG Capital Management.

Homestead managing partner and head of acquisitions Gabe Santos told Agri Investor last year that the firm uses various lease types and, in some instances, its own operators in order to enhance the value of the properties it invests in.

Farmland Fund I owns farms in 11 states producing 16 different crops, according to the statement. Little told Agri Investor last year that Fund I would dedicate 70 percent of its investments to row crops and the remainder to permanent crops. He said that Homestead uses lease types including cash rent, flex lease, net share, fixed bushel, and crop share, as well as custom agreements with tenant farmers.