Two major Canadian pension funds are moving into farmland. The Caisse de dépôt et placement du Québec (Caisse) and the British Columbia Investment Management Corporation (bcIMC) have both made commitments to the TIAA-CREF Global Agriculture LLC which has raised $2 billion to invest in farmland in the United States, Australia and Brazil.
“We see increased protein consumption in developing economies and alternative energy mandates driving increased demand for food, fiber and fuel from a limited resource – land. Direct investment in farmland provides access to the key driver of food production,” said Jose Minaya, managing director and head of global natural resources and infrastructure investments at TIAA-CREF. “In addition, we believe sustainable land management is imperative to help create value over the long term, and we employ best practices across our portfolio accordingly.”
TIAA-CREF manages approximately $2.5 billion in high-quality farmland – more than 400 properties totaling 600,000 acres – in major grain-producing regions, including the United States, Australia, South America and Eastern Europe. “We believe farmland offers investors excellent portfolio diversification given its low correlation to traditional asset classes like stocks and bonds,” Minaya said. “Farmland also acts as hedge against inflation within a portfolio.”
“Investments in agriculture are strategically important in today’s global economy,” said Doug Pearce, chief executive officer / chief investment officer, bcIMC. “bcIMC is pleased with this opportunity to expand our global portfolio and deploy capital over the long term in partnership with like-minded investors such as TIAA-CREF, AP2 and the Caisse.”