The Santa Barbara County Employees’ Retirement System has made separate $15 million commitments to distinct timber and ag-related vehicles this year.
The $3.9 billion pension approved separate commitments to Timberland Investment Resources’ Eastern Timberland Opportunities III in late March and Sustainable Assets Fund III, a vehicle managed by Vision Ridge Partners that includes ag among its sectors of focus, in late May, according to a presentation by consultants Hamilton Lane at SBCERS’ August retirement board meeting.
The commitments drew from the natural resources component of SBCERS’ real return portfolio, which constituted 6.41 percent of the overall portfolio as of the end of March and targets a 9 percent allocation.
TIR is an Atlanta-headquartered TIMO founded in 2003 that manages an 800,000-acre portfolio of timberland in the US Southeast, Northeast and Midwest for pensions, endowments and charitable organizations. According to Hamilton Lane, Eastern Timberland Opportunities III will target timber and timberland investments of between $5 and $50 million in the eastern and southeastern regions of the US.
“Targeted regions have exhibited strong timber growth over the years and benefit from well-developed infrastructure, high tree production and consistent demand,” its analysts noted.
Vision Ridge is a sustainability-focused venture capital and private equity firm established in 2008 that maintains offices in New York and Colorado. Its Sustainable Assets Fund III will target energy transportation and agricultural investments of between $50 and $150 million, according to Hamilton Lane.
Vision Ridge’s previous ag-related investments have included a collection of water-related assets also supported by Renewable Resources Group called Homer LLC, Scottish salmon farm Loch Duart and California-headquartered fruit genetics research and licensing business Sun World, the firm’s stake in which was sold to Bridgepoint this year.
“Agriculture in some ways was an attractor for us to investors,” Vision Ridge managing partner Rueben Munger told Agri Investor after the fund closed on $1.25 billion in April. “That expertise and know-how broadened our networks and was different than being a straight power investor, or even green mobility investor.”
Munger said the firm had carried out extensive research into alternative protein supply chains and that Sustainable Assets Fund III’s strategy would also consider investments in water as a physical asset as well as related technology.
SBCERS other ag-related investments include the Hancock Timberland & Farmland Fund, the RRG Sustainable Water Impact Fund, Tiverton AgriFinance II and International Farming Corporation-managed US Farming Realty Trust II. Acquisitions by Tiverton last quarter increased agriculture’s share by 7 percent to 18 percent of the overall real return portfolio, according to Hamilton Lane.
“Today, permanent crops exhibit stronger supply/demand characteristics compared to row crops, especially when coupled with vertically integrated business models such as a table grape farm with a dedicated packaging facility,” Hamilton Lane analysts wrote. “Long term, US agricultural returns have been attractive on an absolute basis and relative to other real asset investment sectors.”