Agriculture will account for up to 20 percent of investments from a real assets fund that Richmond, Virginia-based alternative investment firm Private Advisors closed Tuesday on $205 million, according to the executive leading the effort.
The firm’s Real Assets Fund drew commitments of between $5 million and $20 million from institutional investors, family offices and high-net-worth individuals. It will invest in small specialist managers and thematic co-investments across real asset categories.
Private Advisors partner Zac McCarroll, who joined the firm in 2014 to lead its real assets strategy after seven years as a director at the University of Texas Investment Management Company, told Agri Investor that the fund will target 15 percent net returns over the 12-year life of the fund, which has an investment period of three years.
“We’ll look at all ag and farmland investments, but just providing a yield is not enough, we need a total return,” he said, estimating that up to 20 percent of the fund would be devoted to agriculture. “We need to see how you produce the total returns that are attractive for our investors.”
McCarroll said the firm would consider investing in secondaries transactions as well as with small managers that have specialized capabilities within a particular niche. Row crop strategies will be considered as well, but the firm is particularly interested in permanent crops that require two or three years to develop and provide a degree of protection from weather and crop cycles, McCarroll added.
Noting that approximately $6 billion has been raised over the past two years to invest in early-stage agtech companies, McCarroll said that while Private Advisors will avoid investing in efforts to introduce new products to the market, there are other agtech sub-sectors the fund plans to explore.
“We do believe that a number of those companies around the implementation of data and the better management and efficiency of assets, have the opportunity for growth equity over this next wave, and we want to be positioned for that,” he said.
Private Advisors is an alternative asset manager with $4.8 billion in assets under management. Headquartered in Richmond, Virginia, the firm maintains offices in New York, Cleveland, Ohio and Austin, Texas and is an affiliate of New York Life Investment Management, a subsidiary of New York Life Insurance Company.