Barings and Homestead Launch $300M Program for Agricultural Lending

Barings and Homestead Capital have teamed up to form a $300 million finance program, targeting the agriculture sector.

Under the new partnership, Homestead broadens its presence in the sector by performing loan originations in "key regions," according to a statement posted by the two firms. Some new markets it will explore include the Midwest, Delta, Mountain West, Southeast, Southwest, Pacific and Pacific Northwest.

Also, Homestead envisions that lending will extend to "a mix of commodity markets, including staple row crops, specialty row crops, and permanent plantings."

Already, the investment manager operates farmland assets, with its capital strategy offering solutions to a range of farmers, from small to large.

For Barings, this will mark an expansion of investment opportunities in the agricultural lending market for the firm.

Gabe Santos, co-founder and co-CEO of Homestead, said that this moves the San Francisco-based company closer to becoming the "gold standard for agriculture investing" as it bolsters its credit capacity.

Dan Little, also the co-founder and co-CEO of Homestead, added to that point: "Our partnership with Barings elevates our loan origination efforts and provides new opportunities for investors to participate in agriculture, an asset class that offers compelling risk-adjusted and uncorrelated returns in a variety of market environments."

According to Barings and Homestead, the national agricultural credit market is worth $624.7 billion. Homestead manages $1.6 billion for clients globally in the credit and equity asset spaces.

Holland & Knight LLP advised Barings on the new partnership, while Homestead was represented by Paul Hastings LLP.

In September, Nuveen made major news in the agricultural sector by launching a farmland REIT, seeking to raise up to $3 billion. The fund will target leased and related agricultural real estate producing food or fiber, while also pursuing investments in infrastructure for water access, storage and distribution.