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Ever since the start of the year I’ve been fascinated, borderline obsessed, with farmland investing. It combines my two favorite things - investing and nature.
Disconnecting from the “real world” and immersing myself in the Andes mountains and the Pacific coastlines of Peru at the end of 2022 reminded me of the strong connection I personally have with nature. Nature, to me, is not only something that brings me peace, but is something that gets me closer to my intuition and helps set my focus. I came back to New York fully energized with a renewed sense of purpose. There’s a reason the indigenous people of the Andes refer to nature as "Pachamama” (mother nature).
Living in New York City its hard to maintain that relationship with nature. I love this city, but I often dream of a New York that is filled with greenery with mountains in the backdrop. A city in the midst of the forest, but along the coast. My artistic skills are rusty, but I was able to bring that dream to life using Midjourney’s text-to-image AI.
As I was looking at alternatives to investing in the public markets I stumbled on the farmland asset class. The NCREIF farmland index, the benchmark farmland index in the US, returned 9.64% last year when the rest of the public markets were in dire straits. Additionally, since 1991, US farmland has returned 10.7% annualized including both income and appreciation, higher than the S&P 500 return of 9.09% per year.
Farmland is also less volatile than both traditional and alternative asset classes, and has been uncorrelated to conventional assets, such as stocks, bonds, and real estate, and broader market indices.
I was impressed, curious and excited at the same time. I wanted to dig deeper, learn more, feed my curiosity. It was my ticket to learn about the food that we rely so deeply on nature for - what, where and how its grown - all from the lens of an investor. I wanted to invest in nature and our food system.
So I’ve started my journey to learn more about the farmland asset class in the US, along with other alternatives investments.
Today’s episode
In today’s episode I have the privilege of speaking with Chris Rawley, CEO of Harvest Returns. Harvest Returns is a FinTech marketplace that allows you to invest in agriculture. The platform allows farmers to raise debt or equity funding from investors via crowdfunding.
Harvest Returns Overview
4 investment verticals:
Specialty agriculture (orchards, vineyards, etc.)
Controlled environment agriculture (indoor farms, vertical farms, indoor aquaculture)
Livestock
AgTech
~12,000 investors on the platform
Closed ~50 deals, 9 exited, 6 with above projected return
Only 4% to 5% of deals make it to the platform after the due diligence process
80% of deals that make it to the platform get funded
Typical capital lockup period:
Debt: 1-3 years
Equity: 5-7 years
Mainly for accredited investors
What you can expect in today’s episode
How Chris found his way into farmland investing
Harvest Returns investment options
US farming regions
Due diligence process
Investor accreditation and barriers to wealth creation
Impact of inflation on farmland investing
Future outlook
Chris’ personal investing experience and tips
It’s a great episode. Hope you enjoy it!
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Chris Rawley: Investing in farms, ranches and tech that help meet our growing food needs