Single LP brings Arable Capital’s debut fund to $300m close

Founded last year, the Washington state-headquartered firm will pursue a strategy calling for hold periods of 15 years or more.

Food and agriculture-focused Arable Capital Partners has closed its debut fund on $300 million.

The vehicle, named Arable Capital, secured its funding from a single LP, which made its commitment in mid-June, according to a filing with the Securities and Exchange Commission.

Arable managing director Greg Richards told Agri Investor that the investor is a US-based institution, but declined to narrow that identification.

The vehicle will focus primarily on midstream assets on the US West Coast and ancillary businesses related to the region’s produce, specialty crops and tree fruit industries, Richards said. He added that the fund will look to make majority and minority investments into operating businesses in the agricultural services, logistics, storage, inputs and other sub-sectors that it can hold for 15 years or more.

“For us, finding the right investor group was critical to this whole model, because it is a different hold period than a lot of investors look for in the private equity world,” Richards said. “Because we wanted to design the fund for a longer-term focus, we had to find an investor group that felt the same way.”

Richards declined to disclose return expectations.

Arable was founded last year by Richards, who previously spent six years as managing director of HarvestWest Investments, a Pacific north-west-focused farmland fund he co-founded. Arable’s other managing director, Derek Yurosek, is responsible for agricultural management and investment oversight at the firm. Yurosek was previously head of agricultural operations for Cottonwood Ag Management, the agriculture asset management team associated with Bill and Melinda Gates’ private holding company, according to the firm’s website.

Richards said that Arable’s decision to brand itself as a “private investment firm”, as opposed to a “private equity firm” was designed to help address a cultural mismatch he has observed in other firms’ approach and to help shape their reception among operators the firm hopes to partner with.

“Some of the existing and traditional private equity funds really have a different model than [what] works for agriculture,” he said. “‘Private equity’ brings to mind a much more short-term investment cycle than what we are trying to do.”