How are institutions investing in the asset class?

August 24, 2018 3:11 pm

Institutional capital has viewed agricultural investments as part of a clearly defined real asset allocation and more recently a growing percentage starting to have an explicate allocation of funds under management.

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;

  • Investing in supply constrained businesses with growth capital deployed along the supply chain including production assets
  • Investing in vertically integrated business’s underpinned by land assets
  • Investing in production and manufacturing assets
  • Identifying and investing where there is market failure and undercapitalised growth business’s in a specific market
  • Investing in multiple commodities within the one fund and providing geographic diversity


Agriculture can play a stabilising role in a balanced portfolio over the long-term. Get in touch with us to learn more about the current opportunities in Australia.

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