Rural Community Development
In addition to its core lending business, CoBank is an investor in equity funds that promote job creation and economic development in rural communities, including a number of funds formed under the auspices of the U.S. Department of Agriculture’s Rural Business Investment Program. As of March 2019, CoBank’s financial commitment to rural economic development funds totaled approximately $75 million. CoBank has also partnered with other Farm Credit organizations, USDA and community banks to facilitate over $300 million in community facility bond investments.
Midwest Growth Partners Fund
In 2014, CoBank partnered with Central Iowa Power Cooperative to form Midwest Growth Partners, a $41 million private equity fund designed to strengthen the economic fabric of Midwestern communities. The fund invests in growth-oriented companies in the upper Midwest, providing succession planning liquidity for retiring business owners or growth capital for established businesses seeking to expand. The fund’s portfolio totals more than $23 million.
Midwest Growth Partners II Fund
In November 2018, CoBank closed on its fifth fund investment, the $113.5 million RBIC managed by the same principals as the Midwest Growth Partners Fund. Investment capital will be directed to growth opportunities benefiting rural-based companies in the agribusiness sector that are located primarily throughout the upper Midwest.
Advantage Capital Agribusiness Fund
In 2014, CoBank joined with eight other Farm Credit institutions to launch a $155 million equity fund formed under the auspices of the U.S. Department of Agriculture’s RBIP. Managed by Advantage Capital Partners, the Rural Business Investment Company (RBIC) focuses on investments that grow rural economies, with an emphasis on companies involved in all aspects of the food and agriculture value chain. Through December 2018, the fund had invested over $100 million in 14 companies.
Innova Ag Innovation Fund IV
In 2016, CoBank, along with seven other Farm Credit institutions, closed on an investment in its second RBIC. Managed by Innova Memphis RBIC, the $31 million fund invests in early stage companies that develop advanced technology solutions for the challenges faced by farmers and agriculture-related businesses. To date, the fund has invested $3.5 million across 13 companies.
Open Prairie Rural Opportunities Fund
In 2017, CoBank joined commercial and community banks, five other Farm Credit institutions and other investors to support the Open Prairie Rural Opportunities Fund. Managed by Open Prairie, a private equity fund management firm, the Rural Opportunities Fund was licensed by the USDA to operate as an RBIC. The fund targets debt and equity investments in growth and later-stage companies across the agribusiness value chain.
Rural Debt Obligations
CoBank partners with other Farm Credit organizations, the USDA, community banks and rural communities to support bond investments in agriculture and community facilities that support rural areas, with a primary focus on rural healthcare. Since 2012, CoBank and its Farm Credit partners have facilitated approximately $307 million of community facility bond investments, and CoBank currently has more than $110 million in potential investments in its pipeline, all of which will include local banks and Farm Credit organizations as part of the investment group. Importantly, these investments provide vital debt capital to projects that likely would not receive private funds without Farm Credit participation.