December 21, 2016

The Oregon Public Employees Retirement Fund (Oregon PERF) has approved an allocation of $400 million to alternative investment vehicles. Of this total, a commitment of $100 million to Homestead Capital USA’s Farmland Fund II has been approved.

This commitment from the $68 billion Oregon PERF to Homestead’s Farmland Fund II accounts for one quarter of the fund’s recently announced $400 million close. The new fund, which surpassed its initial target of $350 million to close oversubscribed, more than doubles the firm’s first fund – Homestead Capital USA Farmland Fund I – which closed in July of last year at $173 million.

Much like Fund I, which claims a portfolio of farms spanning 11 U.S. states production 16 different crops including cotton, rice, wheat, soybeans, tree nuts, apples, table and wine grapes as well as citrus fruits, Fund II will continue along the same trajectory, pursuing investments in both row and permanent crop farmland across the Mountain West, Delta, Midwest and Pacific regions of the country.

“We think the Midwest, the Mountain West, the Pacific and the Delta represent the most compelling opportunities in U.S. agriculture over the next 10 to 15 years,” Gabe Santos, co-founder and head of acquisitions for Homestead told GAI News in July of last year. “They also present us with great climate and crop diversification. Wherever we were going to own and operate land we had to have boots on the ground. We have identified a team of regional farm managers in all areas where we have strong footholds and networks.”

“With the capital from Fund II, we plan to continue to execute on our value-add investment strategy. Because of our local presence and broad agricultural network, we are seeing many attractive investment opportunities in our targeted regions,” said Dan Little, co-founder and portfolio manager of Homestead.

Gabe Santos, co-founder and portfolio manager at Homestead Capital told the Wall Street Journal that fundraising for Fund II began this spring. However, many investors from Fund I returned to make capital commitments to Fund II with both funds attracting the attention of a varied field of institutional investors including pension funds, endowments, foundations, funds of funds, high net worth individuals and insurance companies.

This high interest from institutional investors is reflected in the fact that Oregon PERF joins the $108.5 billion Washington State Investment Board (WSIB) and the $12.3 billion MainePERS fund in backing Homestead’s second fund.

In September of this year GAI News reported that the $108.5 billion Washington State Investment Board (WSIB) was scheduled to consider a possible allocation of up to $100 million to Homestead Capital USA Farmland Fund II, and in July of this year the $12.3 billion MainePERS also made a commitment of $50 million to Homestead Capital Fund II.

This announcement that WSIB was on board was followed in early October by Homestead Capital filing an amendment to their Fund II documents with the Securities and Exchange Commission (SEC) lifting the size of the raise from an original targeted corpus of $350 million to $400 million.

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Lynda Kiernan