Private equity’s Ag bet needs the right talent to grow

Agricultural companies are an increasingly attractive target for private equity firms. For new acquisitions, success hinges on finding the right leaders.

Institutional investors have nearly doubled their presence in agriculture over the last three years, but the learning curve has been steep. Valuations, especially in subsectors like AgTech, were inflated, causing some investors to lose confidence.

Fortunately, many firms are still pursuing AgTech, crop protection and other innovative businesses and finding success. How? They rely on strong portfolio company leadership to connect private equity partners, employees, customers and the broader market.

But recruiting top talent for an agriculture portfolio differs from more familiar sectors. Long-term incentives, particularly equity payouts, take a back seat in negotiations. Candidates also tend to have a lower tolerance for risk. And in many roles, generalists are beginning to outpace specialists.

This article examines these three factors and explains how private equity hiring authorities can win over strong candidates and land the best talent.

Why don’t agriculture executives prioritize equity?

A private equity hiring authority may be surprised to learn that senior agriculture executives place less emphasis on equity payouts than their peers in other industries. That’s because agriculture insiders know exits can take significantly longer in this field.

Overvaluation and longer investment cycles mean a five-year exit window is unlikely (or at least not expected by seasoned executives). Environmental variables, shifting consumer habits and farmer skepticism surrounding new products can all extend the path to what investors consider a sufficient return.

When evaluating new roles, executives want to understand the product’s feasibility more than the theoretical equity payout. Their assessment leans less on investor projections and more on buyer perceptions, because an agriculture product is only valuable if farmers adopt it.

Consider your candidates’ risk tolerance

Innovative companies can be as risky as they are rewarding, and agriculture talent tends to avoid offerings with a low chance of adoption. You can still land strong candidates at early-stage companies by targeting those with higher risk tolerance.

Mid-career professionals are often the hardest to recruit for early-stage roles. They’re comfortable where they are and have a lot of options. Late-career executives can be a good fit, especially if they won’t forfeit existing equity or benefits. Having “been there and done that,” they may be open to something new.

Early-career professionals can be ideal for innovative platforms, but the right profile is a moving target. Tariffs, trade conflicts, inflation and climate change disproportionately affect agribusiness, so it can help to hire someone with varied experience. For example, if you need a procurement lead, consider candidates who’ve worked across multiple products or adjacent industries.

Though this runs counter to the traditional preference for deep specialization, the rapid change of the 2020s means generalists may be a better fit for certain roles.

The rise of the agriculture advisor

One effective technique for new agriculture portfolios is to hire an industry insider to advise on the business and recruiting strategy. This is a smart move for firms just entering agriculture. Advisors can translate between investors and promising candidates who have reservations about the sponsor or product.

The ideal background will vary by company, but decorated industry leaders like former CEOs are a safe starting point for advisor hires.

The takeaway

Private equity’s growing push into agriculture will require firms to adapt their talent strategy. Senior agriculture executives put less weight on equity because exits take longer. They care more about product feasibility and farmer adoption.

Early-stage roles require careful calibration to candidates’ risk tolerance, with generalists often outperforming specialists amid rapid change. And for newcomers to the sector, a respected agriculture advisor can bridge cultural gaps and accelerate credibility.

Align these hiring approaches with the realities of agriculture markets, and private equity’s bet is far more likely to pay off.

To learn more, contact Eric Spell at (336) 217-9116 or eric.spell@charlesaris.com.