Red Reef adds $30m towards $300m Fund I target

Sourcing capabilities and a focus on smaller transactions helped distinguish Red Reef from other farmland managers for the Utah School and International Trust Fund Office, which previously committed $25m to the vehicle.

Red Reef Partners has raised at least approximately $30 million over the past year towards the $300 million target for its first fund, according a US Securities and Exchange commission filing.

The September 17 filing shows Red Reef Farmland Opportunities I had raised $90 million from eight LPs since its first sale in September 2019. A 2019 filing showed the vehicle had raised $61 million from three investors. Red Reef declined to comment.

“Red Reef’s focus on high-quality farmland in the US lends itself to relatively low volatility, while linking itself to inflation through land values and commodity prices,” said minutes from an October meeting of the $2.6 billion Utah School and Institutional Trust Fund Office, which made a $25 million commitment to Red Reef Farmland Opportunities I last year.

“Red Reef was selected over other farmland managers largely based on sourcing abilities and smaller transaction sizes,” it added.

Boca, Raton, Florida-headquartered Red Reef was founded in 2009 by Suzanne Petrela, whose previous experience includes ag-focused positions with the Ospraie Special Opportunities Fund and Soros Fund Management. Red Reef describes itself as a private investment firm that builds and manages customized farmland investment portfolios and commingled fund strategies, for institutional and ultra-high-net-worth investors.

The minimum investment for Red Reef Farmland Opportunities I is $20 million, according to both the 2019 and 2020 filings.

Whereas Red Reef’s 2019 filing identified bfinance and Moeliis Capital Partners as receiving compensation for Red Reef Farmland Opportunities I, the more recent filing does not list either firm. New York-headquartered Castle Hill Capital Partners is now receiving compensation for work on the fund and is authorized to solicit investments from LPs in Florida, Indiana and New York, according to the 2020 filing.

Red Reef focuses largely on third-party tenant operation of high-quality row and specialty crop focused farmland assets in water abundant regions of North America, according to a market overview prepared by consultancy Meketa Investment Group and presented to the $35.2 billion Connecticut Retirement Plans and Trust Funds in February.

“The firm maintains formalized partnerships with industry leaders in farm lending, agronomy and crop science, precision farming, grain marketing, renewable energy development and specialty crop production,” according to the description of Red Reef on Petrela’s LinkedIn profile.

The profile identifies those partnerships as including CHS-owned crop marketing and financial advisory Russel Consulting Group; Agri-Trend, an agronomy and crop science division of NASDAQ-listed software provider Trimble Navigation, and an unnamed “major lender to the US agricultural economy.”

Aberhart Farms, a family-owned dry-land grain farming operation located in Saskatchewan, Canada, identifies one of its advisory board members, Craig Senchuk, as a director of land management with Red Reef. The Aberhart Farms advisory board also includes Agri-Trend founder Robert Saik.