Emerging markets-focused The Rohatyn Group has acquired an agriculture and forestry-focused unit of investment firm Grantham, Mayo, Van Otterloo for an undisclosed sum.
The deal is expected to close during the fourth quarter and will see the unit, GMO Renewable Resources, and its staff move to the New York-based asset manager. Under the terms of the agreement, GMORR principals will retain their 49 percent ownership stake and GMO will remain an investor in GMORR funds.
GMORR invests in both hardwood and softwood timber species as well as other agricultural assets from separate accounts and pooled funds. Established in 1997, the unit manages a total of 600,000 hectares of agricultural land, valued at $2.1 billion, including livestock assets and other crop land.
Headquartered in Boston, GMORR maintains offices in Uruguay and New Zealand.
“Timber and agriculture, both important sectors in many of the countries where TRG invests, are a natural complement to our existing knowledge base and skill set,” TRG chief executive and chief investment officer Nicholas Rohatyn said in the statement. “Powerful secular dynamics, including growth of the middle class, increasing urbanization and access to sustainable resources, underpin opportunities in emerging markets as well as forestry and agriculture.”
According to the firm’s website, GMORR has managed timber properties located throughout the US, as well as Australia, Brazil, Chile, Costa Rica, New Zealand, Panama and Uruguay.
Agricultural investments are a more recent development for the firm and have grown out of the relationships it has developed in timber. For agriculture, GMORR targets investments in both row and permanent crop farmland, in addition to livestock, and utilizes a variety of lease types.
“GMORR seeks to invest in attractively-priced farmland where productivity can be improved and returns enhanced through the addition of capital, optimizing the mix of activities on the farm and achieving scale,” the firm wrote. “We focus on agricultural properties in lower-risk geographies where commercial agriculture is well-developed and good title, high-quality management and adequate infrastructure are available.”
Founded in 2002, TRG has $6.6 billion in assets under management. The firm maintains offices in Singapore, Hong Kong, Seoul, London, Buenos Aires, Lima, Montevideo, Mexico City, Mumbai and New Delhi, employing separate strategies for private equity, real estate, infrastructure, fixed income and hedge funds. TRG’s partners indirectly own a majority of the firm, with the remainder held by unidentified strategic investors in Asia.