WSIB adds $250m to Arable Capital investment

A July filing from the agricultural investment manager referenced provisions of an agreement that prohibits the firm from raising a successor fund.

The Washington State Investment Board added $250 million to its investment into Arable Capital Partners, the Bellevue, Washington-headquartered agricultural investment manager in which it is the sole investor.

In its September Investment Advisory, the $156.6 billion pension said it had approved recommendations from investment staff and consultants Meketa to draw from its Tangible Assets portfolio for the investment into Arable Capital.

“This will be a follow-on investment in a fund that originally started with a $300 million commitment from WSIB in May 2017. In this round, the WSIB will continue to be the sole source of funding for the vehicle,” WSIB representatives wrote.

WSIB declined to comment. Arable did not reply to messages seeking further detail.

The new capital brings Arable’s total assets under management to more than $550 million, according to a July statement from the firm.

“We have seen an increasing number of institutional investors focused on the food and agribusiness opportunity set, as well as the need for sustainability, which is driving positive investment outcomes in the sector,” said Arable managing director Derek Yurosek.

In a July filing, Arable referenced provisions of the offering documents on the single vehicle it manages that currently prohibit the firm from raising a successor fund it expects will grow to include high-net-worth investors, family offices, pension plans, endowments, trusts, sovereign wealth funds, funds of funds, financial institutions and others.

The firm also highlighted risks associated with responsibilities that could potentially arise as a result of the Employee Retirement Income Security Act 1974.

“Arable endeavors to structure the funds so that Arable or related entities are not classified as ‘fiduciaries’ under ERISA as a result of holding such plan assets. If Arable or a related entity were to be considered a fiduciary with respect to plan assets in a fund, such fund may be prohibited from entering into certain transactions if the investment would violate ERISA with respect to such a Fund or may be obliged to take certain actions or refrain from taking certain actions in order to avoid a violation of ERISA with respect to such Fund.”

Arable’s portfolio includes irrigation services provider Laurel Ag & Water, which the firm created in 2018 after having previously acquired micro-irrigation technology provider Hydratec as well as Lodi Pump & Irrigation and Universal Irrigation, which are both headquartered in California. The firm also manages investments into Los Angeles-headquartered Pacific Trellis Fruit and Royal Ridge Fruits, which supplies conventional and organic cherries, blueberries, raspberries and other fruit from its headquarters in Royal Ridge, Washington.

WSIBs investment into Arable accounts for 2.4 percent of its $9.2 billion Tangible Assets portfolio, which constitutes 6.1 percent of the overall portfolio and targets an 8 percent allocation. Other ag-related investments within the portfolio include Agriculture Capital, International Farming Corporation, Homestead Capital and Teays River, among others.