Three deals in the past month show how regen ag is emerging as a “real asset” class, within farmland, drawing asset managers expecting both food and environmental market income streams, as well as a sustainable investing benefit.

Our Chart of the Week illustrates some of the startup and agtech themes poised to benefit, across business models ranging from regen ag MRV and advisory to carbon credit development, and how the number of new companies is rising.

Regenerative agriculture, or regen ag, is a set of farming practices which together seek to minimise chemical inputs while adopting certain tillage practices, with a particular focus on supporting soil health and boosting soil carbon.

Its prescriptions are far less specific than organic agriculture, which can be seen both as a plus and minus, the latter especially with respect to difficulties of reporting and verification, which might undermine its financial marketability and environmental credibility.

Nevertheless, three deals show how regen ag is now seen as ripe for attractive, impact investing returns.

First, on August 28, a blank cheque company sponsored by private equity firm Riverstone and Impact Ag Partners acquired Australian Food & Agriculture Company Limited for $510 million. ANSC (Agriculture & Natural Solutions Acquisition Corporation) said it intended to create an “agricultural decarbonization and premium product company”, and regen ag leader, starting with this acquisition of AFA, a company with land holdings exceeding 225k hectares.

Second, on September 4, timberland and farmland real asset manager, Conservation Resources, announced a $47 million final close on its inaugural North American farmland private equity fund, seeking to “develop and monetize the agricultural and environmental values of the properties in which it invests”. The firm said that the capital was already deployed, in owned or leased organic or regeneratively farmed land, achieving income streams including from carbon sequestration and methane reduction, as a result of regenerative farming practices.

Third, on September 11, Microsoft’s Climate Innovation Fund announced it would invest in Vital Farmland III LLC, Farmland LP’s latest, $250 million real-asset fund dedicated to converting conventional farmed land into organic or regen ag. Microsoft’s contribution would focus on helping develop soil carbon credits across Farmland LP’s existing 18,500-acre portfolio, and expanding the market for regenerative soil carbon credits.