CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, announced today that it has committed $7.5 million to a new private equity fund that will promote job growth and economic development through junior capital investments in agribusiness and other rural industries.
The bank has joined with five other Farm Credit institutions, along with commercial and community banks and other investors, to participate in the first round of financing for Open Prairie Rural Opportunities Fund, L.P. Initial commitments to the fund exceed $55 million, with investments to target areas such as crop protection, ingredients, processing, storage, data management and logistics. Managed by Open Prairie, which is based in Effingham, IL, the fund has been licensed to operate as a Rural Business Investment Company (RBIC) under the U.S. Department of Agriculture’s Rural Business Investment Program, which enables Farm Credit institutions to make equity investments in funds licensed by the agency.
“We’re extremely pleased to be part of this exciting venture, which will support our mission by enhancing the flow of capital to rural America,” said Tom Halverson, CoBank’s president and chief executive officer. “The RBIC program is a unique vehicle that enables Farm Credit entities to partner with commercial and community banks to make job-creating investments in rural enterprises. We look forward to working with Open Prairie and seeing the economic development benefits this new fund will deliver over time.”
“Open Prairie has worked closely with its lead investors to establish the Open Prairie Rural Opportunities Fund as an investment vehicle uniquely positioned to capitalize on the challenges facing today’s agriculture environment,” said Open Prairie Founder and Managing Partner Jim Schultz. Other Farm Credit institutions investing in the fund include AgriBank (St. Paul, MN); Compeer Financial (Mankato, MN); Farm Credit Mid-America (Louisville, KY); Farm Credit Services of America (Omaha, NE) and FCS Financial (Jefferson City, MO).
This is the third time CoBank has invested in a rural-focused private equity fund under the USDA’s Rural Business Investment Program since 2014. Other RBICs that have received investments from CoBank include the Advantage Capital Agribusiness Fund and the Innnova Ag Innovation Fund. CoBank is also an investor in Midwest Growth Partners, a non-RBIC fund focused on rural investments in the Upper Midwest. Inclusive of the Open Prairie investment, CoBank has committed a total of $52.5 million to these funds.
