Homestead Capital Raises $400M For Oversubscribed Second Fund

Nov 15 2016 | 9:41pm ET

Farmland investor Homestead Capital USA has held a final close for its second fund, hitting its hard cap of $400 million in capital commitments and beating its original target by $50 million.

The new fund, named Homestead Capital USA Farmland Fund II, will make investments into operating farmland in the Mountain West, Pacific, Midwest and Delta regions, the company said. It is more than double the size of Homestead’s debut fund, which raised  $173 million in July 2015 and owns a portfolio of farms across 11 states producing 16 different crops.

“We are very pleased with the support we received from returning investors and the quality of new limited partners that we were able to attract to Fund II. Our investor base spans a broad range of partners including public pension funds, endowments, foundations, insurance companies and fund-of-funds,” said Gabe Santos, a co-founder and portfolio manager of Homestead.

“With the capital from Fund II, we plan to continue to execute on our value-add investment strategy,” added Dan Little, also a co-founder and portfolio manager of Homestead. “Because of our local presence and broad agricultural network, we are seeing many attractive investment opportunities in our targeted regions.”

Homestead applies a bottom-up approach to its investment decisions and management, and is committed to preserving the value of farmland over the long term by adhering to sustainable farm management practices. Homestead also applies a top-down overlay to portfolio construction and risk management in an effort to ensure proper diversification and an appropriate risk and reward profile.

Kirkland & Ellis represented Homestead as fund counsel; no placement agent was used.

Founded in 2012 and headquartered in San Francisco, Homestead Capital is a private equity firm investing in operating farmland across the Mountain West, Pacific, Midwest and Delta regions of the United States. The firm has a vertically integrated investment platform led by a team of professionals with deep agricultural and financial experience in investing, farm management, farm acquisition, portfolio construction and risk management.

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