Japan’s PFJC corporate pension invests in Australian farmland
by Hans Poulsen
The Pension Fund of Japanese Corporations (PFJC), which manages several corporate pension plans, will soon be venturing into Australian farmland as part of its investment portfolio.
Through Macquarie Asset Management, PFJC will invest in farmland with various crops, such as wheat, beans, cotton and avocados on farmlands spread across eastern and western Australia.
“We find farmland to be an attractive investment strategy because the sector and the assets play an important role in all economies – and we have no investments in the sector now so it provides us with further diversification,” Yoshisuke (Yoshi) Kiguchi, chief investment officer at PFJC, told AsianInvestor.
Already 12 years ago, he was invited by an asset manager to look closer at the asset class. The investment cases recommended were in Australia and Brazil, but back then Kiguchi didn’t find farmland attractive and not yet “mature” for investment.
“Now, Australia’s farmland sector looks better and more ripe for institutional investments, with increased efficiency and automation. That is still not the case for Brazilian farmland,” he said.
PFJC manages capital from a combination of corporate pension funds, as well as endowment funds and one financial institution. The total assets under management was ¥130 billion ($1 billion) as of March 2023.
FITTING INVESTMENT MODEL
There are more than 200 fund managers investing globally in farmland alone, while the number of related funds investing in food and agricultural assets has increased to 802 funds with more than $125 billion in AUM, according to Valoral Advisors, an advisory firm specialized in the global food and agriculture investment space.
In the May 2022 report “Investing in the pillars of global agriculture”, Valoral Advisors stated there are different ways to get exposure to food and agriculture real assets and infrastructure assets.
“However, the most relevant ones are through direct investments, closed-end funds or alternative investment partnership models with other investors and/or asset owners/operators,” the report said.
These models are well-known within alternative investments within private markets.