February 22, 2022
We are working with JLL to recapitalize a large portfolio of farmland assets which we operate in Uruguay.
This portfolio of eight properties spread across 19,452 hectares is owned by three different European investor groups including institutional investors, family offices, and high net worth individuals. All three groups invested in Uruguayan farmland more than ten years ago and saw their assets gradually lose value under poor management.
When they hired us to turn around their assets, we agreed a scope of work that was as simple as it was restrictive: take over management; address fundamental issues (e.g., soils, infrastructure, tenants); oversee a stabilised land leasing operation; if required, reinvest part of the cash flows generated without asking for new money; and sell the farms once market conditions became favourable.
We have completed our turn-arounds at all eight farms and built a profitable cash flow positive operation. In certain cases we went beyond our mandate, for example convincing our clients to let us build two separate grass-fed beef cattle operations from scratch without investing any new capital.
Yet, many opportunities to add value across this portfolio remain untapped due to the restrictions under which we currently operate. For example, we could convert an additional 6,500 hectares of leased land into cattle operations; consolidate and integrate our cattle business (e.g., managing the herd dynamically across farms, integrating vertically through the entire production cycle); and improving and expanding existing infrastructure (e.g., cattle management facilities, water storage/distribution).
With our clients’ blessing, we developed a detailed business plan to raise capital to acquire this portfolio of eight farms; invest additional capital into expanding, integrating, and optimising our existing operations; and acquire additional properties.
Farmland portfolios of this scale are uncommon and provide an immediate platform for growth with a best-in-class local operator.
We hired Jones Lang LaSalle (JLL) as financial advisors to support this capital raising which we will formally launch next week.
Feel free to contact us to learn more about this opportunity.