Embracing Customized Farmland Investments

Active money management strategies are gaining traction among many investors; according to the 2024 Natixis Investment Managers Pro Fund Selector Survey^[1], nearly 69% of professional fund selectors from major U.S. wealth management firms believe active fund management will be critical for investment success in 2024. This belief is reinforced by recent performance data, showing that 58% of actively managed funds outperformed^[1:1] their benchmarks last year.

This shift among many investors towards active management approaches has propelled Separately Managed Accounts (SMAs)–privately managed investment accounts with flexible and customizable investment mandates–into the spotlight as an attractive option. As of 2023, SMA assets under management rose to nearly $2.2 trillion, with a projected annual growth rate of 13.1% over the next four years^[2].

Recognizing the shift in investor preference toward more tailored investment approaches and the lack of solutions to access the US farmland market—a historically stable and strong-performing asset class in terms of absolute returns—FarmTogether is dedicated to bridging this gap for investors.

FarmTogether SMAs: Customizable and Diversified Farmland Investments

FarmTogether SMAs provide investors with access to a privately managed portfolio of diversified farmland investments across geography, commodity, acreage, list price, deal structure, and investment focus. FarmTogether’s pipeline is currently valued at ~$2.6B^[3] across a variety of crops, locations, and risk profiles.

Unlike many existing investment products, which often come with rigid deal structures, FarmTogether embraces flexibility when calibrating risk profiles, return targets, and holding durations. This allows us to adapt and customize deal structures that better align with different investment objectives.

Our team can tailor deals based on desired commodity exposure, geographic exposure, deal structure, investment strategy, and more. FarmTogether currently manages $196M in assets across a diverse range of geographies and crop types—including 8 different states and over 14 crop types—exemplifying the extensive array of farmland investment opportunities we can provide investors to meet their portfolio objectives.

Competitive Advantages of FarmTogether SMAs

Experience

Farmland investing, like other real assets, demands a nuanced understanding of the intricacies inherent to agricultural investments. From soil quality and crop selection to regional market dynamics and regulatory considerations, the landscape of farmland investing can be complex and multifaceted; experienced asset managers play a critical role in navigating these markets and helping to drive value for farmland investors.

FarmTogether’s team brings extensive experience across farmland investing, asset management, and tech, demonstrated by more than $2.1 billion in collective capital deployed^[4] at institutions like Nuveen, Ontario Teachers Pension Plan, PGIM, and AMERRA Capital Management. Our sourcing and asset management teams possess a comprehensive understanding of the factors that influence farmland values and returns, allowing us to efficiently analyze and underwrite properties at scale. This expertise goes beyond financial analysis, encompassing operational intricacies, long-term market trends, and agronomic factors such as soil health and water availability. FarmTogether specializes in West Coast permanent crop acquisitions, a market known for limited data availability yet offering substantial upside potential.

Technology

Core to our strategy is our technology-enabled sourcing approach. Leveraging our proprietary sourcing tool, Terra, our team can efficiently identify and pursue target farms from both on-market and off-market channels, maintaining a robust pipeline of investment opportunities. We specialize in small and mid-sized farms with acquisition values ranging from $1 to $25 million, targeting a market that represents 70% of US farmland.

Due Diligence

Once we’ve narrowed in on a target property, our team conducts rigorous due diligence to assess each investment opportunity comprehensively. We integrate over 150 data sets from public, private, and proprietary sources into our underwriting process, ensuring a thorough evaluation. Utilizing a thorough 105-point checklist, we examine various aspects, including soil quality, water supply, capital improvements, title deeds, local legislation, cost of inputs, and farmworker wages, among others. This meticulous approach positions FarmTogether to optimize returns for investors throughout the hold period; less than 1% of all deals entering our pipeline are eventually offered on our platform.

Network

Our extensive network of industry relationships significantly strengthens our position in the farmland investment landscape. By partnering with operators, farmers, brokers, and insurers, we gain access to high-quality, consistently productive farmland across the US. Our co-location strategy enhances value by creating operational efficiencies. By leveraging our network to source off-market farms and building regional portfolios around our operators, we aim to maximize returns for our investors while streamlining and scaling farming operations. This approach capitalizes on synergies and helps to achieve economies of scale, providing a strong foundation for long-term growth.

Commitment to Sustainability

FarmTogether has enrolled 100% of our farmland acreage in the Leading Harvest Farmland Management Standard, ensuring our investments adhere to sustainable farming practices. This comprehensive standard, applicable across all crops and geographies, encompasses thirteen objectives addressing the environmental, social, and economic challenges in agriculture today. Key themes include soil health, energy use, water and biodiversity conservation, climate change mitigation and resilience, and community engagement.

To achieve these goals, we implement techniques such as crop rotation, conservation tillage, and integrated pest management. These practices ensure that our farmland under management—currently comprising over 6,900 acres—is managed in a way that helps maintain soil health, reduce chemical use, and conserve water, which may impact bottom-line returns. Additionally, roughly 65% of our acreage incorporates one or more principles of regenerative agriculture, such as cover cropping, managed grazing, composting, and the reduction or elimination of fossil fuel–based inputs, including pesticides.

Alongside our regenerative practices, 100% of FarmTogether’s acres use various forms of precision agriculture. This includes satellite imaging to determine weak areas within a block, irrigation sensors, GPS-enabled tractors that apply variable input amounts based on variability within a block, remote wind machines, and soil, leaf, and water sampling to determine fertilizer requirements. These technologies help promote long-term agricultural productivity while aligning with broader sustainable investing objectives.

Furthermore, 10% of our farms are certified organic or are in the process of transitioning to organic certification. Organic farming at FarmTogether emphasizes natural and sustainable methods, including the use of composts and cover crops to enrich soil health and natural microbial inputs to boost crops' natural pest defenses without synthetic chemicals. Achieving organic certification can not only help enhance environmental sustainability but can also provide an economic advantage by accessing a fast-growing, value-added market.

Explore FarmTogether SMAs

To learn more about FarmTogether and our customized farmland opportunities across the United States, visit our FarmTogether SMA product page.

If you’re interested in learning more about one of FarmTogether’s other products—Crowdfunded Offerings, Bespoke Offerings, Tenancy-in-Common Offerings, and our Sustainable Farmland Fund—please visit our Product Overview.