Area One Farms

Area One Farms is a Canadian agricultural private equity firm with a model based on real partnership, that allows for Canadian and non-Canadian investors to benefit from the asset class. The firm partners with farm owners and injects equity to expand the farmland base and undertake capital improvement to maximize productivity and value. Area One Farms' investors benefit from returns generated from three sources: income from the annual crop, land appreciation, and land value increases driven by the active land improvement work. Area One and the Farm Partner remain in partnership for a 10-year term. The joint enterprise pays all of the farm expenses and land conversion costs. The joint enterprise benefits from crop production over the term of the partnership, which generates the cash to pay the expenses of management and create return for investors. Ultimately, Area One will exit in part to the Farm Partner. The firm does not charge fees, rent, or interest to the farm operator. Operators who partner with Area One Farms earn 100% of the income and appreciation generated by their investment. They also earn some income and appreciation generated by Area One Farms’ investment, instead of a salary. This creates total alignment between management and investors. To date, the result has been higher total returns than in the buy-and-lease model of ownership that is more common in row-crop in Canada.