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Homestead follow-up fund scores $50m from MainePERS – exclusive

The farmland investment firm is raising a second fund, after closing its first on $173m last year.

Farmland investment firm Homestead Capital is raising a second fund and the Maine Public Employees Retirement System has committed $50 million to it, according to the pension’s chief executive Andrew Sawyer.

Homestead Capital closed its first fund on $173 million last year, falling $52 million short of its target.

The firm has not yet registered Homestead Capital USA Farmland Fund II with the Securities and Exchange Commission.

Fund I received support from a range of institutional investors, including Texas Teachers Retirement System, which allocated $15 million, and the University of Alabama. Other LPs include real assets and equity manager FLAG Capital Management, now owned by Aberdeen, and investment consulting and advisory firm Meketa Investment Group. Funds of funds, high net worth individuals and insurance companies also invested.

Managing partner and head of portfolio construction at Homestead Capital, Daniel Little, told Agri Investor at the time that Fund I would target farm assets in the Mountain West, Pacific, Midwest and Delta regions, with about 30 percent of the fund invested in permanent crops. The rest would be dedicated to row crops.

He added the fund’s target geographies would be “the most attractive agricultural regions within the next 10 to 15 years, and are where our expertise can be best applied”. The firm enhances value and diversification with improvements, using various lease types and by bringing in its own operators on some properties, managing partner and head of acquisitions Gabe Santos said last year.

MainePERS has made several commitments to agriculture since 2014, including $100 million to US Farming Realty Trust III; $50 million to the $250 million ACM Permanent Crops fund and $200 million to row and permanent crop farmland management company Teays River Investments. It also committed $150 million to timberland investment vehicle Twin Creeks.

MainePERS is also an investor in the the $893 million food and agribusiness private equity fund Paine & Partners Capital Fund IV, which held a final close last year and is currently being invested.