October 5, 2017

Agriculture Capital, the agriculture-focused investment arm of Equilibrium Capital Management, has closed its second fund – Agricultural Capital Management Fund II (ACM Fund II) – significantly oversubscribed at $548 million.

The fund, which had an initial cap of $400 million, invests in permanent crop farming operations in the Western U.S. focused on citrus, hazelnut, blueberry, and table grape production along with tangential mid-stream assets under a vertically integrated strategy resulting in a “vertically integrated enterprise that grows, packs and markets high-value produce,” according to the firm’s website. Drilling down into the fund’s mission, Agriculture Capital is targeting the formation of a “regenerative food and agriculture system that produces better food at scale and delivers health returns to investors while making a difference in our communities”

As a part of its overall strategy, Agriculture Capital engages in an owner-operator investment model, using its own teams and expertise to operate its own asset portfolio.

“We believe that management is critical to success in the category and have built our team with that in mind,” Rob Hurlburt, principal at Agriculture Capital and lead of the firm’s sustainable agriculture strategies, told GAI News in 2015.

Fund II follows upon its successful predecessor, ACM Permanent Crops Fund, which closed oversubscribed at $255 million in early 2015. Both funds achieved the enviable, in that they each attracted commitments from large scale pension funds. The ACM Permanent Crop Fund received a commitment of $50 million from the $13 billion Maine Public Employees Retirement Systems (Maine PERS), which was later cut to $35 million due to the fund being oversubscribed, Andrew Sawyer, MainePERS CIO, told GAI News at the time. Another investor was the Washington State Investment Board (WSIB). Meanwhile, ACM Fund II went on to secure a $50 million commitment from the Ohio Police and Fire Pension Fund, and a $50 million commitment from the New Mexico State Investment Council.

“We gain real benefits by coming in and actually farming the land such that we can improve its value over the life-cycle,” Hurlburt told Institutional Investor.

Jay Pierrepont, COO and president of asset management with Equilibrium Capital, the co-founder of Agriculture Capital, told Impact Alpha, “We saw the opportunity to bring institutional capital to permanent crops. That sector rewards returns from impact. Good stewardship of the land and community is fundamental to delivering attractive yield and capital appreciation to investors.”

Ensuring good stewardship is critical for an investor that is an owner-operator within an integrated business model focused on sustainability, and Agriculture Capital demonstrated this point in August when the firm announced the appointment of Darren Filkins in the role of president of the Dinuba, California-based operations.

A veteran of Fresh Choice Produce, D’Arrigo Bros., Tanimura & Antle, and Bolthouse Farms, Filkins will be responsible for the oversight of Agriculture Capital’s Suntreat sales and marketing, Central Valley farming operations, Tree Source Nursery, and AC Foods Legacy packing and shipping operations. He also will oversee AC Foods packing and shipping operations in Lindsay, California.

“Darren joins our team with extensive knowledge of the grower side of the business, as well as packing, processing, and distribution experience across several different types of produce,” Agriculture Capital Principal Tom Avinelis said. “Darren has traversed the agricultural landscape from citrus, almonds, lettuce, and carrots to tomatoes and alfalfa.”

“We are in a great position for the future,” said Filkins. “We control every aspect of the process from seed-to-fork. We could not be better set up for success. It is a privilege to lead this team.”

-Lynda Kiernan