China Continues to Build Ag Ties in the East

Population growth, modifications in tastes and preferences, limited resources, and environmental issues are factors pushing up the price of food. Mega institutional investors want access to agriculture and land as an asset class. Some state-owned investors have a strategic purpose in mind such as creating supply chains of food for their home country. On May 14, 2012, TIAA-CREF announced the close of TIAA-CREF Global Agriculture LLC to invest in farmland in the United States, Australia, and Brazil. Investors in TIAA-CREF Global Agriculture LLC includes AP2, British Columbia Investment Management Corporation (bcIMC), the Caisse de dépôt et placement du Québec and other investors.

Increased protein consumption is rapidly spreading in regions like Asia and Africa.

World Population in Billions – Click to Enlarge
World Population in Billions

Historically, institutional investors such as U.S. public pension funds have shunned farmland. In fact, there is minimal data on farmland deals and transactions. The asset class is illiquid and in some cases may increase political risk in a portfolio. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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