Agriculture Capital has hired a former Equilibrium Capital executive to serve as partner as it looks to build on its history in regenerative agriculture through carbon credit sales.
The San Francisco-headquartered firm said in a statement that Ben Vitale will lead a scale-up of the firm’s institutional grade carbon removals. It described a role that will utilize his three decades in carbon and environmental commodities in helping corporates help meet net-zero goals.
Vitale told Agri Investor the role will include putting in place commercial agreements to monetize regenerative practices the firm has implemented since its founding in 2014. The role will also include developing a strategy to expand the firm’s farm management platform to take advantage of the opportunities being created the voluntary carbon markets.
“We’ve been literally measuring everything for a decade,” said Vitale, whose work with Equilibrium overlapped with the initial creation of Agriculture Capital (which was sponsored by Equilibrium). “AC had a twinkle in our eye that we would be able to monetize that 10 years ago, and here we are monetizing that for the benefit of our investors. We are very close to generating the actual verified emissions reductions. That’s huge.”
AC managing director Rob Hurlbut told Agri Investor whereas the firm has not underwritten carbon into return expectations on its previous funds, the markets have now evolved in a way that presents an opportunity to do so. He highlighted Verra’s VM0042 standard as setting a high enough bar for carbon measurement to help create an opportunity for all landowners.
Hurlbut said the permanent crops-focused firm’s LPs are aware it is second in line for a VM 42 credit with a completed project in Australia, but AC has not made any pledges regarding how it will impact returns.
“The evolution of the carbon markets is happening very much in a private market framework. The ability to define what a really high-quality credit looks like will determine the value of that credit and therefore its impact for our existing and future investors,” he said. “That’s why we brought Ben on, because he’s really been a leader in carbon monetization over the past 20 years.”
Portland, Oregon-based Vitale described experience that included early work on deforestation projects in China and policy advocacy that played a role in encouraging the creation of California’s Low Carbon Fuel Standard (LCFS).
He had already worked on 25 anaerobic digester projects by 2010, he said, when he began working with the owners of Threemile Canyon Farms, which is an Oregon dairy producer housing a project that would later be expanded by Equilibrium to convert methane from cow waste into fuel sold into California’s LCFS market.
According to his LinkedIn profile, Vitale spent six years ending in May 2019 as co-head and member of the investment and management committees at Equilibrium, where his role focused on sustainable infrastructure projects through the firm’s Waste and Water business. The profile shows that in September 2019, Vitale began a position as founder and chief executive of Portland, Oregon-headquartered Resilient Infrastructure, a project developer and manager focused on renewables, wastewater and water infrastructure.
In February 2021, Equilibrium sold its Threemile Canyon facility to Resilient, which is owned by Partners Group. Vitale declined to provide details of the sale beyond explaining he was among the investors in a deal sponsored by Partners Group that marked a “very attractive exit” for Equilibrium and their investors.
The experience of investing first through closed-end funds and eventually creating a dedicated platform company, he said, has influenced his thinking about how to build on AC’s foundation of regenerative practices.
“Everybody thinks of us [AC] narrowly as the owner/operator fund management model. I look at it and I see a platform company like Resilient that has capabilities that can move multiple kinds of investors and funds into this sector,” said Vitale. “We’re looking at all sorts of ways that we can take platform expertise and use it for current investors and future investors.”
AC managed $741 million as of December, according to a March regulatory filing.
