Farmland LP, a fund manager specializing in organic agricultural acreage, launched its third farmland fund looking to raise $250 million as that type of investment has produced higher returns than commercial properties by a wide margin over the past year.
Commercial properties have returned a negative 6.6% return over the past four quarters, according to the National Council of Real Estate Investment Fiduciaries Property Index. By contrast, the NCREIF Farmland Index has posted positive returns of 8.19%.
The NCREIF Farmland Index tracks more than $16 billion of investments in income-producing agricultural cropland. Vital Farmland III would be the San Francisco-based firm’s third and largest fund to date.
“Our new fund provides a unique opportunity for institutional and accredited individual investors to tap into this high-potential asset class, fostering regenerative farming practices that benefit our planet,” Tom Sullivan, managing director of capital markets and investor relations for Farmland LP, said in a statement.
Vital Fund III is aimed at extending Farmland LP’s mission to transform conventional farms into sustainable, organic operations, catering to the surging consumer demand for food products derived from organic sources.
Farmland LP manages over 16,000 acres with about $250 million in assets under management.
The firm acquires conventional, chemical-dependent farms and reengineers them to organic agriculture, to boost cash flow and land value.