May 8, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Co-founded in 2016 by Francisco Roque de Pinho and Joaquín Labella in Uruguay – a country with vast unexplored agricultural potential wedged between Argentina and Brazil – TLG Management Partners (TLG) works to implement improvements on, and then manage, underperforming farmland properties in South America on behalf of European investors. 

Common challenges associated with the global pandemic, including economic uncertainty, depressed commodity prices, and market volatility, followed by supply chain disruptions, high commodity prices, and rising inflation, held TLG back from expanding the way they wanted. But it also gave them time to consolidate their portfolio of properties and leases; to optimize its management processes and framework; redirect its geographic exposure away from difficult markets; grow and build its local ground team; and build out cattle operations from scratch on farms that were previously leased to third parties. 

Understanding that poor management is what often undercuts asset value, TLG’s approach is to assume management; address the fundamental issues of soil health, infrastructure, tenants etc.; oversee a stabilized land leasing operation; and if needed, reinvest a portion of the capital flow without asking for new money; and then sell farms when market conditions are favorable.

“All things considered,” said Francisco Roque de Pinho, co-founder, TLG Management Partners, in February 2022, “we came out of this pandemic with a significantly better performing and more resilient organization in place.”

Indeed, today TLG oversees a portfolio of nine farms totaling 50,000 hectares (123,553 acres) across Uruguay and Paraguay producing beef, soybeans, wheat, corn, sorghum, canola, rice, and timber. 

Previously commenting on Uruguay, Roque de Pinho noted, “The country combines abundant farmland, rich soils, plentiful water resources, a temperate climate with a transparent market, the world’s first national livestock traceability system, and a dollarized economy that welcomes foreign direct investment.”

He continued, “An unassuming agriculture powerhouse with plenty of unexploited potential, Uruguay should continue producing a growing share of the grains and high quality, sustainable animal protein that the world  demands in ever increasing quantities.”

Now, TLG has announced the successful completion of a secondary sale of Estancia Villa Lucero – one of the most iconic farming properties in Uruguay – which the firm has been managing for the past five years.

Comprising 9,000 hectares (22,240 acres) in the heart of Uruguay, the farm, which produces beef cattle, soybeans, rice, and timber, was sold to an undisclosed European family office, providing liquidity to TLG’s original client, a consortium of European investors, explained TLG.

The estate is comprised of 18 distinct land plots that TLG explained are broadly grouped into three soil categories: 2,169 hectares (24.1 percent) of deep, highly fertile, well-drained soils; 2,230 hectares (24.8 percent) of medium productivity plain soils; and 4,604 hectares (51.1 percent) of medium to low productivity poorly drained deep soils.

It also counts a power grid connection; a comprehensive water system including four dams, 22 ponds, three water tanks, nine water troughs, and 20 kilometers of channels to irrigate up to 600 hectares of rice; three cattle facilities including chute, pen, corral, cattle dock, and a cattle bath; four barns; 140 kilometers of exterior and internal fencing; a 1,250-meter airstrip with a hanger; two horse sheds; four stables; and seven residences with 35 bedrooms. 

Having leveraged its expertise in sourcing, developing, managing, executing, and divesting, TLG arranged the transaction, stating that as part of the deal it will continue managing the property for the foreseeable future.

“We are delighted to have fulfilled our original investment mandate with this secondary sale,” said Roque de Pinho. “We are now eager to collaborate with the new owner to continue developing Villa Lucero and establish it as the leading  producer of sustainably reared grass-fed beef in Uruguay.” 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.