Mad Capital has launched the Perennial Fund II (PFII) to provide farmers in the US with tailored loans that help them transition to regenerative organic farmland while increasing farmer profits.
PFII is targeting $50 million, and it has received early commitments from Builders Vision, The Rockefeller Foundation, the Schmidt Family Foundation, the Zellis Family Foundation, the Zarpet Family Foundation, Matthew Zell Family Foundation, Lacebark Investments, and nine other investors.
Mad Capital’s fund portfolio supports regenerative organic agriculture, and the PFII aims to bring Mad Capital’s total financing to over 150,000 acres of farmland and partnerships with over 50 farming families.
Agriculture is one of the leading drivers of climate change, and extractive farming practices cause biodiversity loss and healthy soil. And regenerative organic farmers reverse this damage by working with nature rather than against it, creating economically and ecologically resilient food systems.
Mad Capital’s second private credit fund will provide regenerative organic farmers in the U.S. with tailored loans to cover their capital needs. This will allow them to transition to organic farming, invest in soil health, develop new markets, and diversify businesses.
PFII will utilize a blended structure with a first-loss pool to support the underlying performance of this quickly emerging sub-asset class within ag lending. And it is designed to generate impact forward and uncorrelated current yield within the core fixed-income allocation of a portfolio. The early indications from Mad Capital’s Perennial Fund I (PFI) portfolio show that this risk is reduced further within the niche of regenerative organic farmers due to the substantial increase in on-farm revenue from organic premiums.
Just 1% of farmland in the US is certified organic, compared to nearly 10% in the EU. And the lack of access to funding is a primary barrier to broader adoption, as traditional financing institutions lack the understanding and financial resources to support regenerative organic farmers. Transition finance, like what Mad Capital provides, is one of the keys to keeping up with the surge in consumer demand for regenerative organic food.
Mad Capital has been actively lending to regenerative organic farmers for five years. And as of February 2024, Mad Capital deployed over $25 million to 30 farmers, helping them transition over 10,500 acres of land to organic and grow their total portfolio acres by 26% per year and up to 79,115 acres. PFII brings Mad Capital closer to the ultimate goal of financing 5 million acres of regenerative organic farmland by the end of 2032.
KEY QUOTES:
“We are aiming to build a bridge between two distant worlds that need one another to transition our food system — Wall Street and organic farmers. Providing farmers with access to capital gives humanity a shot at producing an abundance of healthy food while being ecologically accountable to our working lands and those that steward them.”
– Brandon Welch, co-founder and CEO at Mad Capital
“Mad Capital is playing an integral role in the transition to regenerative organic agriculture. Through their innovative and holistic approach, they are providing capital to farmers who have been overlooked and underserved by traditional capital markets, while their broader platform also offers technical assistance, market access, and a sense of community. We’re excited about Perennial Fund II and its potential to de-risk this space and open up capital market access more widely to farmers looking to transition their practices.”
– Sara Balawajder, Director, Investments at Builder’s Vision
“The Rockefeller Foundation believes Mad Capital’s model and team have a strong track record of delivering both the performance institutional investors are seeking and the impact on people and climate the world needs.”
– Maria Kozloski, Senior Vice President of Innovative Finance and Economic Equity at The Rockefeller Foundation
“This is a bold reimagination of financing in nature’s image, empowering farmers to create farm ecosystems that are good for the Earth and good for humanity.”
– Phil Taylor, co-founder at Mad Capital
