He hails from an East Coast seafaring family, but Tom Eisenhauer is making his mark as a landlubber these days. The former investment banker and tech investor heads Bonnefield Financial Inc., a new Canadian entry into the rising investment market for agricultural land. Bonnefield expects to close its first fund at year-end, and has amassed a portfolio of 7,000 acres. While the global food-price surge helps his cause, Mr. Eisenhauer insists the payoff is long-term gains for investors and for farmers who lease back land from the fund.
Your family background in Nova Scotia doesn’t suggest a future in farmland.
The Eisenhauer family came from Germany primarily as farmers in the 1700s. But they figured: “Farming in Lunenburg County? I think we’ll go fishing.” And my father was a habitual entrepreneur who was involved in shipbuilding and metal fabrication. So he made the processing equipment for fish plants and things like that. My brother now owns that company and has expanded it. I’m the black sheep because I’m the only male for generations who is not an engineer.
Originally, two Eisenhauer brothers and an uncle came to Nova Scotia in 1753, and arrived too late to set up shop that year. It’s said they spent the winter on a ship in Halifax harbour. After that, I believe the uncle and one of the brothers said, “Forget it. I’m out of here,” and went to Pennsylvania. There was already a German community there and the family of General Dwight Eisenhower came from those origins. It’s spelled a little differently, but back then they probably couldn’t spell. It’s rumoured the one who stayed behind met a local girl and put down roots in Lunenburg – and that’s the Canadian branch.
How did you end up in this business?
Back in 2008 I sold my [technology merchant banking] firm, and timing is everything in life – it was just pre-crash. The obvious thing was starting a new private equity fund, but no one was going to fund private equity in 2008-2009. So I was looking around at other assets.
So what was your eureka moment in farmland?
I do a lot of cycling, and my wife is from the Paris-Brantford area in Ontario. At that time, potash was going through the roof and everything, and I was riding around that area and seeing a bunch of farms for sale.
I thought: If I buy a farm and sit on it until I retire, it can’t be a bad investment. That led to three months of research. I had no idea that farmland was such a huge institutional investment class around the world, but not in Canada. Over decades, it’s had very steady-Eddie equity-like returns, extremely low volatility, and no correlation to public markets – at a time when markets were going crazy. I thought this is too good not to pursue.
But I realized I was this fishing-community guy from Lunenburg, who might get his head handed to him in farmland. I put the idea on the shelf but within days I had a call from a friend, Jan Kaminski, whose family has the Colonnade real estate group in Ottawa. They’d gone a long way down the road [thinking about land investment and lease-backs to farmers]. So we put together Bonnefield Financial.
Is everybody calling you now because farmland prices are soaring?
If I could take money from non-Canadians, I’d be retired by now. But we adhere to farmland-ownership restrictions in Saskatchewan and Manitoba which means all our investors must be individual Canadian citizens.
Farmland leasing is a concept that’s been around internationally for generations, but it’s so new in Canada. We’re getting certainly a lot more phone calls here, but I get four calls from non-Canadians for every one from Canada.
Why are Canadians behind the rest of the world?
