California Permanent Crop
California permanent crop is not a monolithic asset class — it is a portfolio of sub-basins, each on its own SGMA compliance trajectory. Fund 04 holds only acreage in sub-basins with a credible path to sustainable yield under SGMA, and only within those sub-basins acreage with senior surface-water access, banked groundwater, or a documented pumping record that will survive the local groundwater sustainability plan.
Why this strategy, why now.
The Sustainable Groundwater Management Act reshapes California agricultural land value by sub-basin, not by county. Some sub-basins will be materially fallowed by 2040 under their groundwater sustainability plans; others will not. Fund 04 treats SGMA scoring as the primary underwriting screen and treats crop selection as a downstream decision from water security.
How we underwrite this fund.
- SGMA sub-basin scoring precedes every acquisition. Sub-basins classified critically overdrafted with no credible surface offset are not underwritten.
- Senior surface-water rights (Central Valley Project, State Water Project, and pre-1914 appropriative rights) are scored parcel-by-parcel against historical delivery reliability, not nameplate allocation.
- Banked groundwater in formal banking programs (Kern Water Bank, Semitropic, others where documented) is inventoried and treated as an asset on par with fee title.
- Crop mix — almond, pistachio, wine-grape — is selected within a sub-basin based on residual water security and expected variety-specific demand, not on last-cycle price.
Where the acreage sits.
San Joaquin Valley (Kern, Tulare, Kings, Fresno, Madera — sub-basin selective), Sacramento Valley (Colusa, Glenn — surface-preferred), Central Coast (Paso Robles, Santa Barbara — wine-grape only with documented water security).
What we do after the acquisition.
Regional asset managers coordinate orchard/vineyard management with specialist operators. Every parcel has a documented irrigation plan tied to its SGMA water budget. Pistachio orchards are managed on longer replant horizons than almond; wine-grape parcels are managed against variety-specific replant economics.
What we watch, and what we don't hedge.
SGMA is the principal long-horizon risk and the principal underwriting screen — parcels are acquired against the most conservative reasonable groundwater sustainability plan scenario, not the mean. Almond and pistachio price cycles are shorter-term; wine-grape is exposed to varietal demand shifts.
Structural notes.
Fund terms shown are structural summaries only. Prospective limited partners should refer to the Private Placement Memorandum, Limited Partnership Agreement, and Subscription Documents for complete terms, fees, and risk disclosures.
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