As institutional investors continue to seek “pockets of calm” amid the turmoil, farmland’s resilience during the global financial crisis and the pandemic’s immediate aftermath is likely to be top of mind.
New Zealand dairy giant will launch a fund that will pool capital from investors such as sovereign wealth funds and pension funds to invest in land and fixtures of dairy farms through a farm-owning entity.
UBS Global Asset Management has established an Australia and New Zealand farmland investment advisory service to meet the growing institutional demand for assets, particularly from Asia.
Farmland has become the darling of alternative investing, sending hedge funds and wealthy investors into bidding wars for plots of land once deemed ordinary. And it is not just big money getting in on the game. From Stockholm to Chicago to Vancouver, ordinary investor money is pouring into fields around the world.
"The stock market's pretty wild. The bond market's nothing. CDs are zero," said Steve Runyan, an agricultural real estate appraiser, "and so you have a tremendous amount of money in pension funds and investment funds of some kind that need some kind of return." Some of his clients for California farmland are international companies looking at global population trends.
Pension funds and other corporate owners have spent only a tiny fraction of the billions of dollars they could invest in farmland, but they are definitely kicking the tires on potential purchases.
The $23.6 billion Iowa Public Employees’ Retirement System and the $600 million Tucson Supplemental Retirement System are currently exploring potential investments in farmland as a means of diversification.
