Sporting Ranch Capital, a fund management firm that buys, refurbishes and sells prime ranches in North America, has received the first commitment to its second fund from a repeat investor: T. Boone Pickens, a veteran private equity investor.
Fund II is targeting $50 million and is an eight-year fund with two one-year extensions. It will likely target a similar investor base to the $30 million Fund I, which garnered commitments from family offices and high net worth individuals in 2012.
Fund I is now fully invested and will likely start divesting its assets in two weeks’ time when three ranches are going on the market, according to Jay Ellis, founder of Sporting Ranch Capital.
“I wouldn’t be surprised if I sold them all this summer,” said Ellis, as the ranches are “unique properties”, he added.
SRC focuses on recreational sporting ranch properties in Colorado, Wyoming and Utah and spends 80 percent on refurbishing the fishing facilities on the properties. Once these are enhanced, the profitability of the ranches is significantly increased, according to Ellis who describes them as “gold”.
Capital deployment is a big challenge however, because the criteria for his ranches are very strict. And Ellis is keen to maintain the exclusivity of the ranches so has ruled out developing the ranches for tourism in the future.
But Ellis is enthusiastic about the future. “I see us having Funds III, IV and V,” he said, adding he has plans to expand his locations to the Southeast and Northeast of America.
The minimum commitment to Fund II is $1 million with a three year commitment period.