Agents of Impact | September 19, 2014

Beartooth Capital: Conserving Wide Open Spaces

The team at



Western ranches present iconic American images of cowboys and cattle, homes on the range and purple mountains majesty.

Those images have been fading for decades, as the West’s wide open spaces have been degraded, encroached and subdivided. Now, investors in Western ranches are finding another way to make money: conservation.

Beartooth Capital, based in Bozeman, Montana, has raised about $70 million from family offices and individual investors to buy up nearly 30,000 acres in about a dozen ranches. The premise is that restoration and protection add far more value than depletion and exploitation.

Beartooth buys ranches that have been degraded or neglected. It restores rivers and spring creeks to improve fisheries and wildlife habitat. It protects wetlands and implements sustainable grazing practices. It solves legal, title and infrastructure problems. It puts much of the property under permanent conservation protections, such as easements. In the end, the properties are far more valuable financially, ecologically and agriculturally.

“Doing the conservation, that makes us money, that doesn’t cost us money. In the longterm, the property is worth more because of that,” says Robert Keith, Beartooth’s managing principal and co-founder. “Ranches are one of the few investment classes where that’s true.”

The fund’s hands-on expertise helps it operate in the fragmented, illiquid and often highly emotional ranch market, where comparable values and market data is scarce. Other private equity funds are also tapping the long-term demand, for trophy properties  with great fly-fishing, hunting and family retreats.  Sporting Ranch Capital, backed in part by billionaire oilman T. Boone Pickens, is buying ranches in Colorado, Montana with its $30 million first fund.

The firm’s private placements documents commit the fund to both competitive risk-adjusted returns and real conservation results.

Beartooth’s bet is that conservation is net-positive, not negative, for ranch values when the fund exits from its investments. Easements or deed restrictions limit future options and thus have been generally assumed to lower property values. But serious conservation can co-exist with, or even boost, other cash flows, such as recreational income from lodges, agricultural leases, conservation easement payments, restoration funding, mitigation credits for wetlands or endangered species, recreational income, agricultural leases and yes, limited development at the edges of the property, close to roads and other infrastructure.

For example, Beartooth bought Summit Spring Ranch east of the Idaho’s Salmon-Challis National Forest. A deal with the Nature Conservancy added 623 acres and road access. In exchange, Beartooth permanently protected 1,960 acres, or just over half of the property, through a conservation easement held by The Nature Conservancy.

Of the nearly 30,000 acres Beartooth has bought, the most ecologically important 15,000 have been protected, often in partnership with conservation organizations.

Keith launched Beartooth in 2005 with a Stanford Business School classmate, Carl Palmer and tested them at an earlier firm, Greenbridges. Beartooth closed its first fund in 2006 and its second in late 2012.

Since he was a child, Keith’s family has owned  a ranch near Cody, Wyoming, where he fished, rode and hiked. “I fell in love with this area as a kid, but I didn’t know it would enter my work life,” he says. “Then I thought, ‘How could I invest and do it in a way that is good for the world?”

Delivering conservation results is not a bonus, but central to Beartooth’s success. Without measureable benefits, land trusts and other major conservation partners won’t bring Beartooth deals.

“We have investors who say, ‘If you’re all about making money, I have lots of other places I can do that. And it it’s all about conservation, I have lots of places where I can give my money,” Keith says. “‘You guys are the unique opportunity to do both, to make the market-level financial returns that are driven by doing the conservation work.’ One is not to the detriment of the other.”


Beartooth’s first fund has returned about 45 percent of capital called to date. The fund’s first complete exit generated positive returns, despite falling prices for neighboring ranchlands.

Social and Environmental

Beartooth has protected 15,000 acres and has restored 45 miles of rivers and creeks through 34 conservation and restoration projects with 41 private, non-profit and government partners.

One of a series of impact profiles produced in conjunction with the Case Foundation’s new publication, “A Short Guide to Impact Investing.”

Note: this post has been updated from a version originally published April 23, 2014.