Romanian farmland targets family offices and wealth managers

UK based farm management company Velcourt and CEE farmland property specialist Mintridge International have launched a Bucharest based joint venture to target agriculture property opportunities at family offices and wealth managers.

These investment opportunities are being structured as individual projects valued at €14m-20m each. The idea is to enable, say, a family office to invest in a single project. This is to avoid issues arising from ownership of farmland spread across multiple investors, for example, if one in a group of investors decides they wish to exit. Instead the projects become controlled by a single investor.

Velcourt SRL, the Romanian based JV, aims to provide investors with a dual stream of income generated from sales of soft commodities such as what, maize, sunflower and rapeseed, as well as ongoing capital appreciation of farmland in the country.

Mintridge’s role is to engage in consolidation of plots of land, as farmholdings in Romania are typically subdivided into unconnected smaller plots. Consolidation may take place, for example, by engaging in land swaps with neighbouring farms in order to create contiguous plots that are more efficent. The firm has been engaged in and buying land in the CEE since 2003, particularly Poland.

Relationships at the mayoral level are said to be crucial in this process of acquiring and developing land in Romania, as land disputes may be settled at the municipal level via the person of the mayor.

Velcourt’s role in the JV is as a farmland manager. Currently it manages some 50,000 hectares for 81 client business in the UK. It is also active across Europe in arable crop, fruit, vegetable and livestock farming, although the Romanian projects are understood to focus on arable opportunities. Velcourt operates its own internal R&D department developing technology, and analysis capabilities around crop growing.

 

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