Farmland investment and management firm, LandFund Partners announced it is currently under contract to acquire farmland valued at over $10 million through its Fund IV during Q2 2019.
The deals will lift total acreage held by Fund IV to 4,000 acres across the Arkansas and Mississippi Delta region, valued at more than $17 million.
Founded by firm president John Farris, LandFund currently manages more than 20,000 acres of farmland with identified long-term water sources that are then rented to farm operators under the supervision of a professional management team. All pooled, the company’s assets under management carry a value exceeding $120 million.
“Mississippi River Valley farmland is very attractive when compared to other regions,” said Farris in 2015. “ If you look at acreage costs and yields per acre in the Midwest and compare those prices to acreage costs and yields per acre in Arkansas and Mississippi, you will find that row crop farmland in our target region offers you much more value per acre.”
The last acquisition made through Fund IV occurred in October 2018. The acquisition, which was the second for the firm’s fourth vehicle, consisted of 1,000 contiguous irrigated acres in western Mississippi.
“While tariffs have caused short-term disruption in certain crop prices, global supply-demand dynamics and the ingenuity of the American farmer have positioned U.S. farmland for continued strong, non-correlated investment returns,” said Chris Morris, managing director at LandFund Partners, at the time.
Fund IV, which has an equity hard cap in place of $30 million, is building upon LandFund’s established presence in its targeted geographic region.
“Fund IV continues to patiently execute on the strategy that was communicated to our investors. All of Fund IV’s assets meet our investment criteria: close proximity to existing holdings, distressed or opportunistic situations, opportunity to increase cash rents, opportunity for value-add irrigation investments, good soil types for a diverse crop mix, and access to abundant groundwater resources,” said Farris.
Moving forward, the company has plans to build out Fund IV through another three-to-four more acquisitions in its pipeline throughout the remainder of 2019.
“Farmland returns are non-correlated with traditional stock and bond investments,” added Chris Morris, managing director and CFO. “By adding farmland to their portfolio, our investors are able to reduce their exposure to market risk and create a more stable and efficient investment portfolio. The non-correlation of farmland returns, Fund IV’s diversification across multiple assets, and our firm’s value-add strategy have been key considerations of investment managers allocating capital to the sector.”
– Lynda Kiernan