Harvest Returns, a Fort Worth-based investment platform for agriculture, announced that it has launched the Sustainable Agriculture Opportunity Zone Fund to help farmers in Qualified Opportunity Zones (QOZs).
Opportunity Zones—established by the federal Tax Cuts and Jobs Act of 2017—are intended to boost economic development by providing tax benefits to investors. The act’s provisions provided the potential for investors who re-invest capital gains into long-term investments in QOZs to receive significant tax benefits.
With Harvest Returns’ new fund, it intends to achieve tax-advantaged capital appreciation in projects that are sustainable economically, socially, and environmentally.
“Investments in farming and agriculture are a natural fit for Opportunity Zone Funds,” Harvest Returns CEO Chris Rawley said in the statement. “Our Opportunity Zone Fund is unique in that it is one of the very few funds not focused on urban commercial real estate.”
Rawley said typically, most investments in this realm are merely betting on gentrification of the surrounding neighborhood. But, that’s not the case with Harvest Returns.
“Our fund is primarily focused on bringing capital to farmers in rural areas. About 40 percent of the designated opportunity zones are located in rural areas across the United States,” Rawley said. “These areas present an untapped opportunity for job creation and to strengthen the food system with investments in sustainable agriculture.”
The fund will invest in agricultural businesses in economically disadvantaged regions of the United States, giving investors tax-favorable risk-adjusted returns in non-correlated assets. In other words, if two assets are non-correlated, the price movement of one the assets has no effect on the price movement of the other asset.
Harvest Returns said it has put together an experienced group of agriculturalists and investment professionals to manage the fund. It has also teamed up with FoodFutureCo, a veteran food and agrotech fund manager.
“We believe this is a critical step toward mainstreaming agriculture investment,” FoodFutureCo Managing Director Shen Tong said in a statement. “Agriculture, especially sustainable and regenerative agriculture, is following innovations in good food trends to become the biggest opportunity since the internet for investors.”
Harvest Returns will choose ‘highest quality’ businesses for fund
Rawley said Harvest Returns has spoken to dozens of farmers representing over $245 million in assets.
“Our experience conducting due diligence on agriculture projects will enable us to select only the highest quality businesses for this fund,” Rawley said.
Founded in 2016, Harvest Returns is a financial technology company that aims to bring agricultural producers together with investors. Its online platform provides curated, diversified offerings of farms, ranches, and timberland to qualified investors.
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