December 24, 2024

2024 was a year of unprecedented dealflow within the agriculture industry. From the surge of new funds and strategic investments to the flurry of M&A activity, cropland and carbon innovations, and rapid geographic expansions, the sector has been a hotbed of activity. Deals unfolded at a breakneck pace across the spectrum, from agtech innovations and regenerative ag to sustainable natural capital initiatives. We were fortunate to have a front-row seat to this unfolding story, observing these trends closely across key themes. While this overview cannot capture the full breadth of activity, it provides a valuable reflection on the myriad of deal flow and opportunities that emerged throughout the year.

Farmland & Timber

• Farmland Partners Inc. (FPI), a Denver, Colorado-based real estate investor, is offloading nearly $300 million in farmland assets to Farmland Reserve, an investment auxiliary of The Church of Jesus Christ of Latter-Day Saints (LDS). The massive portfolio of assets comprises nearly four-dozen farms across 41,554 acres of farmland in Sunbelt states including Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma and the Carolinas, most of which comprises row crops such as corn, soybeans, wheat, cotton, rice and peanuts.
• London-based Fulcrum Asset Management has chosen Domain Timber to oversee sustainable natural capital investments on its behalf as part of its recently launched illiquid assets strategy that is designed to appeal to U.K. pensioners. Domain oversees $7.9 billion in total assets across Domain Timber Advisors, which boasts approximately $745 million in AUM as of Q2 2024, and fellow RIA Domain Capital Advisors.
• BNP Paribas Asset Management (BNPP AM) has introduced the BNP Paribas Future Forest Fund in response to global demand for sustainably managed timber investments. With a target size of $500 million, BNP launched the fund alongside Copenhagen, Denmark-based International Woodland Company (IWC).

Climate Funds in Demand

• BTG Pactual has had a banner year, attracting Big Tech names like Meta Technologies and Microsoft to its massive carbon-offset programs through which the companies will earn millions of nature-based carbon removal credits for their activities. BTG Pactual Timberland will generate the carbon credits through its $1 billion Latin America reforestation effort, including the Cerrado biome in Brazil — located southeast of the Amazon Rainforest.
• Morgan Stanley Investment Management (MSIM)’s inaugural 1GT climate fund reached a final close, albeit a little short of the Wall Street firm’s original finish line. MSIM achieved the final close of its climate private equity fund — dubbed 1GT — after attracting $750 million in equity capital commitments.

Japanese Banks Pivot to Ag

• The Development Bank of Japan (DBJ) made its maiden investment into the Japanese agricultural sector, backing Nippon Agriculture through its DBJ Startup Innovation Fund.
• Sumitomo Mitsui Trust Bank (SMTB) committed to invest in Laguna Bay Fund 2, an Australian food and ag fund overseen by Laguna Bay Group, as an impact equity investor. The investment by SMTB can be considered a coup for Laguna Bay considering that the Japanese fiduciary is required to be highly selective in the manner in which it invests corporate pension funds.

Investors Come Back for More to Back Ag

• Blue Stripes, a U.S.-based cacao startup looking to transform the cocoa supply chain, has secured $20 million in a Series B round, attracting some high-profile backers to the deal that valued the company somewhere between $80 million-$120 million.
• Grounded Capital, a San Francisco-based SEC-registered investment advisor, has made back-to-back investments to support sustainable food production in the United States. These included a $22.5 million investment into Lotus Foods coupled with a new equity investment into the Straus Family Creamery in June and July, respectively. Grounded Capital, which oversees approximately $2 billion in AUM, backs established, mission-driven companies that are aligned with its values and where it can apply a systems-based approach to investment capital.
• After securing €5 million (US$5.4 million) in seed capital in early July, Dornbirn, Vorarlberg, Austria-based Tree.ly, a startup dedicated to protecting European forests, is well capitalized for its carbon offset projects. Participants in the round included PortfoLion Capital Partners, aws Gründungsfonds, SymbiaVC and tyrolean business angel (tba) network, the proceeds from which will accelerate Tree.ly’s growth while supporting its mission to unlock the full potential of European forests.

Cross-Border Regenerative Ag

• Regenerative agriculture is growing like wildfire, spreading across borders. Middlefield, Ohio-based Advancing Eco Agriculture (AEA), which helps growers to make data-based decisions, has clinched a global partnership with Turkish precision-ag tech company Topraq to expand access to regenerative solutions. The collaboration is structured to include an investment from Topraq into AEA.

Water Deals

• Amid an urgency for water supply and sanitation infrastructure investment, Kansas City, Missouri-based asset manager WaterEquity has raised over $100 million for its Water & Climate Resilience Fund.The global water crisis hits home for Gary White and Matt Damon (yes, that Matt Damon), co-founders of non-profit Water.org, the entity through which WaterEquity was formed.
• Australian ag investment manager GO.FARM has scooped up a pair of water-rich agricultural value-add projects, including the Dellapool Aggregation and Sandmount North in Narrandera, New South Wales and Katunga, Victoria, respectively. Worth a combined A$150 million (US$101.3 million), the investment involved the participation of Qantas Super, an A$9 billion (US$6 billion) super fund. Qantas Super’s investment in the water projects is part of a bigger A$200 million (US$135.1 million) commitment it made to GO.FARM earlier this year.

Looking Ahead to 2025

Investors face a landscape of both opportunity and uncertainty in 2025. While the path ahead may be clouded by lingering inflation concerns and central bank monetary policy, several key trends offer promising avenues for growth. According to JPMorgan Wealth Management, these include a gradual easing of global policy, a surge in capital investments, a heightened focus on portfolio resilience and the ongoing exploration of new frontiers. The agriculture industry is poised to continue offering compelling investment opportunities within this evolving landscape.

As this year draws to a close, we look forward to continuing our in-depth coverage of these crucial themes and exploring the many other exciting developments shaping the agriculture industry in 2025. We invite you to join us in the new year as we strive to provide stakeholders with the most comprehensive and insightful analysis of the latest trends and innovations that the ag industry has to offer.