A couple of 30-something guys swapped high finance for farmland and now manage $575 million
Raul Hernandez for Business Insider: The worlds of finance and farmland might seem incompatible. On the one hand, you have quarterly results, slick salesmanship, and quick gains; on the other hand, there's crop cycles, heavy machinery, and unpredictable conditions.
But according to Daniel Little and Gabe Santos, two former finance professionals, there's an opportunity to marry the two and generate returns for both farmers and investors.
Santos and Little are cofounders and portfolio managers of Homestead Capital, a private-equity firm with $574.5 million assets under management raised through two separate funds. Some of their largest investors include the Oregon Treasury, Washington State Investment Board, and the Maine Public Employees Retirement System.
When investing in farmland, they do not use one set strategy. They sometimes acquire unused farmland and bring in a farm operator. They sometimes take over the lease of a farm and work with the existing farmer. They also fund equipment upgrades when necessary.
The San Francisco firm oversees 18 crop types on 27 investment projects in 13 states. Homestead is on track to meet its target returns of 11 to 13% unlevered internal rate of return and an annual cash yield of 5 to 7%, according to Santos and Little. Full Article:
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