Brief notes from my interview with Chris Rawley
Not a farmer
Did not grow up in the ag world
Military – Navy
Went to work in real estate
First alt investing was real estate
Worked in different industries
Few years ago became enamored in ag as asset class
Ag is an asset class that is taken for granted
Crowdfunding act of 2012 for investors
- Pooling small $ together to buy larger assets
- Allowed retail crowdfunding for non-accredited investors
A number of real estate funds focusing on apt buildings, etc
Created “harvest returns” about a year ago
Put money in private placements of ag
Have investors w existing land and make the opportunity available for investors
Focused on the production side (crops, land, etc)
HR focused on accredited investors
Non-accredited by end of the year
Reasons to invest in ag
- World population
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- Urbanization – arable land is shrinking
- Wealthy populations shift from plant protein to animal protein, more ag devoted to protein
- Returns
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- Farmland has outpaced S&P, reits, gold, since 1970
- The underlying land
- Price of crops has increased
- Operations of the land
- Tangible
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- Like real estate
- Real land
- Returns positively correlated to inflation
Common investment for large institutions
Very challenging to access these investments
There are some farmland and timberland REITs
- Problem: correlated with greater stock market
There are some funds but have really high minimums ($250K)
Liquidity is a double-edged sword
Allowing on the marketplace:
- Confidence in management team
- Location, trends
- Expected returns
Regulatory environment
- Act of 2012
- SEC published rules for
- Big learning curve regarding regulation
How will you validate yourself to a skeptical market?
- Why is ag a good investment?
- Why crowdsourcing a safe/good idea?
- Learning curve on the farmer side
Looking for people raising $500K-$2M
Sale/leaseback deals
Provide creative financing opportunities
How much of portfolio? ~5-15%