August 24, 2018

Alden, Iowa-based Summit Agriculture Group has launched the $300 million Summit Ag Opportunities I Fund with the goal of making investments in the ag value chain in the U.S. Midwest.

Over a three-year period beginning in mid-2018, Summit expects to see this fund acquire controlling interest equity positions in between five and eight mid-sized agricultural operations along the agricultural supply chain from production, to protein processing, to renewable oils, and feed ingredients.

Founded in 1990 by agribusinessman Bruce Rastetter, Summit has build up a diverse portfolio of ag operations including row crop, beef cattle, and pork farms in the U.S., and has built a significant presence in Brazilian farmland and biofuels.

Since 2009 the group has been raising capital to fund select projects, like the launch of the first large-scale corn ethanol production plant in Brazil in 2016. The $115 million facility, which is  located in Lucas do Rio Verde in Mato Grosso – Brazil’s largest corn and soybean producing state – is an international partnership between Summit Agricultural Group, the Brazilian agribusiness, Fiagril, and Summit’s investment partners – Tiger Infrastructure Partners and Laverack Capital Partners.

The plant, which is expected to help Brazil meet its rising demand for domestic ethanol while also providing high-fiber and high-protein co-products to the Brazilian livestock industry, is the most modern and efficient plant of its kind in the world, producing 60 million gallons of corn ethanol per year as of completion of construction in mid-2017.

Managing a total $500 million in assets, the group has also launched a range of U.S.-based agricultural funds, with its last fund being its $60 million Summit Ag Fund III, filed with the Securities and Exchange Commission (SEC) in July of last year.

Along these lines, the Summit Ag Opportunities I Fund is the first of a possible three funds to be launched by the group with assistance from its New York investors.

“The lack of private equity in Iowa has really limited opportunities,” Rastetter told Business Record. “I worked with my friends in investment banking in New York to bring capital collectively to Iowa so we can work together to make the whole better.”

Targeting ag operations with revenues of between $25 million and $200 million facing succession challenges, Summit Ag is looking to leverage its investor relationships in New York with established farming operations in the U.S. corn belt with the goal of keeping existing teams and the operation’s connection to its community in place.

“We see this as an opportunity for a single larger fund, which, as opportunities arose, would be able to invest in these companies that may need assistance in succession planning,” Rastetter said. “Combined with our ag network and our New York financial relationships, I think from an investor standpoint that makes us different than anyone else in this space that invests in ag.”

-Lynda Kiernan