A Dallas-based private-equity firm -- backed by T. Boone Pickens -- is looking to deliver major returns to its investors, and a whole lot of trout as well.

Sporting Ranch Capital’s business plan focuses on flipping ranches. The two-year-old firm buys up neglected ranch land, refurbishes the property and then sells it off to wealthy outdoor enthusiasts. Fund manager Jay Ellis says he expects to provide investors with returns of over 20%.

Hedge fund and oil magnate T. Boone Pickens, the first investor in Sporting Ranch Capital’s initial $30 million fund, said the investment was a no-brainer.

“The idea is land with water, and that’s an idea that will sell,” said Pickens. Currently the owner of a 68,000-acre ranch in the Texas panhandle, Pickens said he’s bought and sold over 100,000 acres of ranch land himself.

The Man Behind the Land

To a certain extent, Pickens was also making a bet on fellow Oklahoman Ellis, who formerly ran the equity sales desk for Morgan Stanley in Texas. Ellis – a “hustler” in Pickens’ words – is tasked with finding both diamond-in-the-rough properties and willing buyers. The ranches cater to people looking for big-game hunting and fly-fishing.

“What I’ll look for in a ranch is one that has been in the business of cattle ranching. They’re land rich, cash poor and haven’t put a dime into this for the past 30 years. That is kind of our perfect blank canvas,” said Ellis.

Ellis said the ideal properties are between 200 and 1,000 acres with live water – a minimum of a mile for a stream or a river. He’ll purchase ranches for between $2 and $8 million, and then invest in improving the property – not a cheap process, when enhancing a stream can cost up to $1 million per mile. (Stream restoration improves not only the aesthetics of the ranch, but also the trout fishing.)

Sporting Ranch Capital will experience its first big test over the next two weeks. The first property, a 204-acre ranch on Utah’s Upper Provo River, just went on the market with a listing price of $9 million. Two other ranches, in New Mexico and Colorado, are set to list for $6.9 million and $14.9 million, respectively.

Pickens said Sporting Ranch Capital – where minimum investments are set at $1 million – is likely to benefit from the oil-and-gas boom occurring right now in the U.S., as it is creating new millionaires. Investors may also be drawn to Sporting Ranch’s “trout dividends:” They’re allowed to fish on the ranch properties before they’re sold off.

“There’s a lot of money being made in the oil-and-gas business, and there will be a lot of those people that will buy land,” said Pickens. “They’re not very far away, in Texas, Oklahoma, North Dakota and Wyoming … Most of the guys are outdoorsman -- they like hunting and fishing.”

Ellis is also confident in the prospects for the first properties. “The interest has been overwhelming,” he said.

Ellis is now working on a second fund, targeting 8-10 properties and $50 million. But he said he’s not looking to make any fast moves.

“It’s a seller’s market … I’m being patient and waiting,” he said.

Follow Gabrielle Karol on Twitter @GabrielleKarol