Barings and farmland investor Homestead Capital USA have announced a $300m (£220m) asset-based finance investment partnership, which aims to expand Homestead’s loan origination in key regions, while broadening Barings’ access to investment opportunities in the agricultural credit market.
San Francisco-based Homestead manages $1.6bn in credit and equity assets for clients globally, including pension plans, endowments, foundations, insurance companies, and family offices. Its credit strategy provides capital solutions to borrowers ranging from small and mid-sized farmers to large, vertically integrated agribusinesses.
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Through this forward flow arrangement with Barings, Homestead will expand its loan portfolio and national footprint within the US agricultural credit market.
New coverage areas will include the Delta, Midwest, Mountain West, Pacific, Pacific Northwest, Southeast, and Southwest, with anticipated lending to a mix of commodity markets, including staple row crops, specialty row crops, and permanent plantings.
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“We have been building our credit capability for years and want to be the gold standard for agriculture investing,” said co-chief executive and co-founder Gabe Santos.
“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,” added co-chief executive Dan Little.
“Through this partnership, we are expanding Barings’ asset-based origination network into the U.S. agricultural market and offering our clients access to differentiated agricultural credit opportunities,” said Burak Cetin, managing director for the asset-based finance team at Barings.
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