Alden-based Summit Agriculture Group’s recently announced $300 million investment fund will be the first in a string, CEO Bruce Rastetter said in an interview with the Business Record.

Summit Ag Opportunities I, LLC,  will invest in six to 11 agriculture projects in protein processing, equipment manufacturing and the broad field of renewables such as oils and feed ingredients, Rastetter said. A second and third fund are planned with the help of Summit’s New York investors, and more may be added later.

“The lack of private equity in Iowa has really limited opportunities,” said Rastetter, a Republican Party activist, former president of the Iowa Board of Regents, and onetime leader in the ethanol and hog industries. “I worked with my friends in investment banking in New York to bring capital collectively to Iowa so we can work together to make the whole better.

“What we have had happen is, in the Midwest particularly, there are private companies that have had a founder/owner who is looking for an exit and wants to keep the legacy and to protect the community. The kids went elsewhere, and they are looking for a succession plan for their company.”

Since 2009, Summit has been raising money for targeted projects. Those have included a two-site corn ethanol development in Brazil, several land funds in the United States, and the project to open a beef packing plant in Tama. Summit manages about $500 million in assets.

What the new fund does is provide capital for midsize businesses, those with revenues between $25 million and $200 million that face questions as their leaders retire and their children perhaps have moved into other industries. 

Summit Ag Opportunities will insist on a majority share of each company in which it invests, but will look to keep present company managers in place as part of a broadened and strengthened management team, Rastetter said. That way the companies can remain active in the community and avoid a sale to a larger firm that might not be as committed to a Midwestern community. 

“We aren’t restructuring people,” Rastetter said. “We take something that is working and make it better.”

The targets for the financing are likely to be in the Corn Belt, from North Dakota to Ohio, he added.

“We see this as an opportunity for a single larger fund, which, as opportunities arose, would be able to invest in these companies that may need assistance in succession planning,” Rastetter said. “Combined with our ag network and our New York financial relationships, I think from an investor standpoint that makes us different than anyone else in this space that invests in ag.

“We’re excited about it,” Rastetter said. “We fill a void in the marketplace, and we think we will attract others who want to invest. That’s a good thing for ag in the Midwest, particularly Iowa.”