Washington State Investment Board to Weigh $300 Million Outlay to Teays River Investments

The Washington State Investment Board is expected to boost its agriculture oriented investments when it meets April 16th to consider a $300 million commitment to Teays River Investments LLC, a U.S. farmland and agribusiness investment company. The board’s Private Markets Committee recommended the investment April 2nd. If the deal is approved by the board, it will be subject to further negotiations of terms and conditions, board spokesperson Liz Mendizabal said in an e-mail.

Teays River, based in Zionsville, Ind., was launched in 2007 by Richard Halderman through sponsorship from Ospraie Special Opportunities fund. Teays raised $903 million between 2009 and 2012 to invest in farmland and agribusinesses. Investors include New York retirement fund sponsor TIAA-CREF, Teacher Retirement System of Texas and the Second Swedish National Pension Fund, known as AP2.

In addition to more than 500,000 acres of U.S. row-crop holdings, Teays River owns five operating companies. They include Hartley Dairy Company, Hartley, Texas; Steveco Inc., a California-based grower, packer and distributor of table grapes acquired for an estimated $150 million in 2011; Aurora Dairy Group, an Aurora, Colo. integrated organic dairy producer and processor purchased in 2011 in a $250 million leveraged buyout; and, Remington Hybrid Seed Company, an Indiana-based producer of corn and soybean seeds, acquired in June 2013.

Teays River Investments is an open-ended investment holding company with operating subsidiaries. If Washington State Investment Board approves a proposed $300 million investment, it would have a seat on Teays' nine member fiduciary Board of Managers.

The pending Teays River commitment would lift the Washington State Investment Board’s allocations to cropland and agriculture facilities to $1.1 billion since the board entered the sector 18 month ago. Those investments include $100 million to veteran farmland manager UBS AgriVest to assemble a portfolio of U.S. permanent and vegetable cropland; a $50 million commitment to ACM Permanent Crops LLC, a new private fund investing in permanent cropland in Calif., Ore. and Wash., and related mid-stream assets; $250 million to Steelhead Midstream LLC, managed by Wood Creek Capital Management, which will make seven to 10 primarily U.S. agriculture-related investments such as vegetable hauling equipment and rail grain hoppers, grain elevators, water rights, and irrigation infrastructure; $150 million to Cascade Midstream Partners I LLC, a separate account managed by Bunge North America that will invest in grain storage and processing facilities in the U.S. Northern Plains and Canada; and a $250 million commitment to International Farming Corp.’s U.S. Farming Realty Trust III, a U.S. cropland fund seeking to attract $1 billion in capital.

These investments are part of the board’s $1.4 billion tangible asset investment program aimed at generating a long-term, stable income stream. The program targets investment returns that outpace inflation by at least four percentage points over a rolling five-year period. The board manages total assets of $104.5 billion. ■

© 2015 Farmland Investor Letter All rights reserved.

This entry was posted in Agricultural Investment, Cropland, Institutional Investment and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>