INVL completes €13.6m purchase of Baltic ag businesses

Capital was deployed from the firm’s evergreen ag and timberland vehicle which had a €32m first close at the start of November.

INVL Asset Management has completed the €13.6 million acquisition of seven subsidiary companies from Lithuanian agricultural company Linas Agro Group.

The companies collectively own around 2,000 ha of agricultural land through various subsidiary businesses, which produce crops including winter and summer wheats, and rapeseed. Linas Agro Group entered into a 25-year lease agreement with INVL to continuing farming the land as part of the transaction.

The deal represents the first acquisition to be made by INVL’s 2020-vintage Sustainable Timberland and Farmland Fund II. The evergreen vehicle had a €32 million first close at the start of November.

“We are acquiring the portfolio from one of the strongest and largest agricultural groups in the Baltics,” INVL partner Martynas Samulionis told Agri Investor.

“[The 25-year lease] works in line with our strategy because the fund is evergreen, and we have a unique chance to have such a long lease contract with one of the strongest groups.”

STAFF II has a €100 million target, a €200 million hard-cap and features an initial three-year lock up. It will initially invest in complementary farming and timberland assets in the Baltics, with the potential to explore opportunities in Eastern and Central Europe. The fund will target 8 percent-plus net IRR.

The vehicle’s buy-and-lease investment strategy was attractive to Linas Agro because it gives the business the confidence to continue farming the land over the long term, said Samulionis, while “freeing up their working capital and allows them to invest in their other projects.”

INVL does not anticipate it will be able to close any further “large portfolio transactions” before year-end, confirmed Samulionis, but he did not rule out the possibility of completing smaller deals.

He added that the fund has not added any new capital commitments since its first close, although discussions with prospective LPs remain positive and they have been encouraged by the length of the lease signed with Linas Agro.

Commitments to STAFF II have thus far have come from a host of individual European private investors.