One reason agriculture and agri-food are attracting the attention of pension funds and alike is the fact that between 2007 and 2017 U.S farms returned on average 12.8% outperforming all other asset classes according to the NCREIF Farmland index, demonstrating the role Agriculture can play in a portfolio.
Institutional capital from the northern hemisphere has started to flow out of Europe and North America into regions that offer strong value with less competition for farmland and well positioned to take advantage of the opportunities presented in Asia. In addition, trade related uncertainty is dragging down sentiment amongst institutional investors who have been actively looking to buy in the US.
As interest grows fund managers and GP’s have looked to create structures and opportunities to enable institutional investors to extract more value from investments whilst reducing risk. Some examples are;