DGC Asset Management to launch farmland investment vehicle for investors

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DGC Asset Management | 9 September 2014

DGC Asset Management to launch farmland investment vehicle for investors

UK-based project developer DGC Asset Management is to launch a new subsidiary which will invest in farms and estates in the US, Latin America and Europe. The new venture, Vaccinium (UK) Limited, has been structured to allow High Net Worth individuals and Sophisticated Investors gain exposure to highly productive, modern farms, and expects to deliver an IRR of around 15%.

The Company will be managed by the team at DGC, and has also engaged Non-Executive Directors and Agricultural Consultants in order to achieve the vehicle's objectives.

Vaccinium's primary investment involves an investment in 382 acres or former grassland in Oregon, USA. DGC and its partners have spent the past 18 months developing the asset into a highly productive blueberry farm using the latest technology and science in order to create a best in class asset that will deliver substantial yields for Vaccinium's investors. 60 acres has already been developed, and the reaming site will be completed in the autumn during the next available planting season.

David Garner, a Director at DGC and Executive Director of Vaccinium said, "We spent a year researching different crops, regions and projects as we wanted to find the most appropriate blend of risk and reward for investors seeking exposure to well-managed farmland. We already know that buying into quality land assets is the best way to leverage long-term trends in population growth and growing consumption in emerging markets, and the blueberry market just made sense.

We're incredibly excited about the launch, we've been working on this for over two years, during which time we've been lucky enough to engage the services of some of the industry's leading operators who have chosen to become key stakeholders in the project."

Farmland outperforms all but Private Equity

The fundamentals that support and drive value and profit in the agriculture sector are not really correlated with the performance of financial markets, and so farmland offers an opportunity to acquire an asset that is unlikely to depreciate, and that is capable of weathering any economic storm, as witnessed during the most recent financial crises when farmland values continued to rise as 30% was wiped off the value of equity investments almost overnight.

80 million new mouths need feeding every year, and 5 billion of the world's poorest are enjoying an exponential rise in household income which they are spending on a more resource intensive western diet based on protein consumption. It takes 7kg of grain to produce 1kg of meat, and so these new meat-eaters add a tremendous pressure to the existing supply base which is also diminishing fast, creating a two-pronged attack on our ability to meet this demand.

With land losses at an all-time high, and demand rising fast, DGC believe that investors with exposure to well-managed, productive land will control one of the most valuable assets on earth, and will be best positioned to retain and grow their wealth over the next 10 years.

For more information on Vaccinium, and to request an Executive Summary, please contact DGC directly.
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  • 09 Sep 2014

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