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Mellinger’s Minutes: Institutional Investors Getting into Agtech

May 12, 2017

At HighQuest, recent interactions with investors have focused on their interest in agtech. These investors, large and small are looking for strong returns, diversification, and improved agricultural asset performance.

Conventional wisdom is that primarily, strategic players and private/angel investors are the ones allocating to these growth-oriented innovation companies. While these conventional investors remain involved in a crucial way, HighQuest advisory practice has found much broader, and in some cases surprisingly strong, interest by institutional investors in agtech investing.

The reasons are straightforward. After 10 years of substantial farmland, infrastructure, and midstream allocations, institutional investors, the farm managers they hire, and the farmers leasing their land are all faced with identical pressures to improve crop and financial yields of their assets, and to do so as sustainably as possible. “Doing more with less” is the dominant theme and is where agtech provides the most leverage. These endowments, pensions, sovereign wealth funds, and large scale family offices are, therefore, turning their attention to agtech’s potential to play an important role in generating value for their assets in the short and long terms.

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