February 18, 2021

By Michelle Pelletier Marshall, Global AgInvesting Media

Carter Malloy had a vision a few years back. While working for a large investment firm, agriculture as an asset class caught his attention, especially since he grew up in a farming family in Arkansas and had been buying farmland alongside his father. Impressed with the benefits of the class: attractive yield, low volatility, low leverage, and inflation hedge, to name a few, he sought to “democratize the asset class” to a broader audience. AcreTrader was born in 2018.

This online U.S. farmland investing platform uses crowdfunding to remove the traditional barriers to farmland investing, which includes a thorough due diligence process to source high quality farmland with an attractive investment profile. As Malloy, CEO and founder of AcreTrader, explained it, each parcel is put into a unique LLC and investors can purchase a share, “basically an IPO for an individual farmer”, he said. With minimal initial investment cost, the purchase can provide returns from two sources: increased land values and annual rents paid by a farmer.

In April 2020, AcreTrader raised $5 million in a seed round led by RZC Investments and including Revel Partners and Malloy. Additionally, the round included private capital commitments from technology, finance, and agricultural leaders. Proceeds from the capital raise were earmarked for expansion of investment offerings, improving investor education about farmland, and continuing scaling operations to support surging demand on the platform.

GAI News caught up with Malloy in his hometown of Fayetteville, Arkansas.

1). Please briefly explain how the platform works.

Through our online platform, investors buy a portion of a unique LLC that owns a parcel of land – this can be done in just a few minutes electronically. AcreTrader handles all aspects of administration, payments, management, etc., making it a truly passive investment.

2). Where do you stand with minimum investment and what are the exit options?

Minimum investments are typically $20k to $45K, though we have some farms with minimums as low as $10K, and also have investors who have allocated millions on our platform. We ask that investors approach farmland as a long-term investment and hold through the entire holding period that is typically five to 10 years. However, if an investor does need to sell after the minimum lockup period, they can do so directly to others. We are hoping to have a secondary liquidity option on our platform soon as well.

3). How has the response been to the platform? What type of customer growth are you experiencing? What do you envision in your five-year plan? 

We are seeing a surge in interest from investors, landowners, and farmers. Our long-term plans for farmland are simple: access, liquidity, and transparency.

4). It’s getting close to a year now since your $5 million fundraise – how have the funds helped expand your business and offerings? And is a new round on the horizon? 

The investment funds have helped us tremendously in our ability to hire great talent from engineering and data science to farm and financial analysts. We are a fast-growing and capital efficient company, but will likely have another round soon given we see an opportunity to make an even bigger impact on the industry.

 5). Our Global AgInvesting audience is varied – institutional investors, private equity, family offices, agribusiness executives, etc. – how might this service benefit them/their clients?

We are a land marketplace and actively work with institutions and family offices. For folks interested in buying and/or selling land through a variety of different structures, we can offer exceptional diligence, speed, transparency, and efficiency.

ABOUT CARTER MALLOY

Carter Malloy is founder and CEO of AcreTrader. He grew up in a farming family and has a lifelong passion for investing and agriculture. Prior to AcreTrader, he was part of an equity investment firm for five years. Before joining in 2013, Malloy was a managing director with Stephens Inc., a large private investment bank, where he was an equity research analyst focused on the Internet, Data & Analytics and Real Estate Processing sectors. Prior to Stephens, Malloy owned small businesses focused on internet marketing and sustainable fuel technologies.