Tiverton Advisors raises $440m for credit strategy – exclusive

The North Carolina-headquartered firm surpassed its hard-cap to close its distinct credit vehicle at $325m and took approximately $115m in co-investments.

Tiverton Advisors has closed its Tiverton AgriFinance II credit fund on $325 million, surpassing its $300 million hard-cap, a source told Agri Investor.

The North Carolina-headquartered firm also took roughly $115 million in co-investments for the strategy, bringing its total capital raised to approximately $440 million. Tiverton was aided in its fundraising effort by global placement agent FirstPoint Equity.

The debt vehicle had a $150 million target and was launched in 2019. It had a $33.3 million first close in September 2019. A February 2020 filing with the US Securities and Exchange Commission showed the vehicle held $130.4 million collected from nine limited partners.

Tiverton founder and managing partner David Chattleton confirmed the fund’s final closing figure to Agri Investor, but declined to confirm any further details. “We are excited to continue our long-term financial, agronomic and environmental support of the production agriculture space,” he said. “Our latest credit fund allows us to provide cost-effective and bespoke financial solutions for the American farmer.

“We appreciate our new and historical investors for their support and recognition of our leadership position in agriculture and, specifically, credit.”

Investors into the fund included a combination of pension funds, insurance firms, endowments, consultants and a handful of family offices.

Agri Investor’s source was unable to provide a figure for the target return rate, but said the firm would seek “opportunistic returns” as it executes its strategy of lending “senior secured debt against land, crops or livestock.”

“Given a number of government backstops or programs that are available in the US, Tiverton Advisors is able to generate those opportunistic return levels while taking downside risk off the table,” the source said.

The credit fund will lend to farm owners and operators with operations of between 1,000 acres and 2,000 acres. Approximately two-thirds of the vehicle is exposed to a combination of row crops, permanent crops and livestock in the US Southeast, Midwest and Pacific Northwest.

“Loan proceeds are expected to typically refinance existing credit,” the source added. “They may be used for capital farm improvements such as irrigation or storage, or they may simply go towards businesses’ expansion.”

Tiverton Advisors has already deployed one-third of the vehicle, with median loan sizes of around $30 million.

“A lot of the banks, particularly over the last 12 to 18 months, have been skittish and have pulled back from ag debt,” said Agri Investor’s source. “In fact, some of the large players have actually redlined new loans entirely.”

Tiverton is also expected to extend several loans in the $25 million to $100 million range. Agri Investor’s source said this is considered “a no-man’s land” by large banks, because the debt client is “likely to be a big farm but is not really an agribusiness yet, so Tiverton has found an underserved niche there.”