Model

  1. Home
  2. Model

Our Model is Unique…

Our professional farm managers diversify operator risk in each region and ensure standardized, high quality farm management practices across regions and operators. In addition, our farm managers will typically have direct relationships with other service providers in each region as well, which can help ensure an optimal supply and distribution network that is not limited by the individual operator’s personal network.

Key Factors in Homestead’s Regional Farm Manager Model

Independence
By maintaining existing relationships with farm owners, operators, seed and fertilizer dealers, etc., the regional farm managers are in a better position to source new opportunities

Capacity

Our target of $173mm for the fund was based on our assessment of the capacity of our regional farm managers to manage additional farms. We are comfortable that the current team is very capable of handling the 20-30 farm projects that we will acquire across all regions. We also have a plan in place to augment our existing regional teams should it become necessary in the future.

Sourcing
We have negotiated and formalized a right to first look or simultaneous first look with all of our regional farm managers. This ensures that we will be shown and have a chance to evaluate the best opportunities seen by our regional farm managers.

Compensation
Regional farm managers will receive a percentage of the net farm income generated on the farms that they manage. This provides direct incentive for the farm managers to maximize the annual yields.
A portion of the annual fund management fee will be carved out and put into a bonus pool for the regional farm managers. Upon successful exit of a property (returns in line with or exceeding our targets) bonuses tied to the sale value will be paid out to the regional farm manager. This provides direct incentive for the farm manager to preserve the value of the land over the holding period and help with the exit