TIAA-CREF Asset Management closed a $3 billion farmland investment partnership, the TIAA-CREF Global Agriculture II LLC. The Fund exceeded its $2.5 billion fundraising target.
TIAA-CREF Global Agriculture II will invest in high-quality farmland assets in Australia, North America, and South America. The Fund obtained capital commitments from several international and U.S. institutional investors with numerous return commitments from its first farmland investment firm.
Some of the investors of TIAA-CREF Global Agriculture II include AP2, Cummins UK Pension Plan Trustee Ltd., Environment Agency Pension Fund, Greater Manchester Pension Fund, New Mexico State Investment Council and the TIAA general account.
The investors made a commitment to hold the assets for more than 20 years. The partnership has a lifespan target of 21 years. “Farmland is not something you want to lever or flip in the short term. None of our investors are making a bet on increased growth. We built something more attuned to a long-term investor just like us,” said Jose Minaya, senior managing director and head of private markets asset management at TIAA-CREF.
The company’s first farmland investment partnership, TIAA-CREF Global Agriculture I closed with $2 billion in commitments in May 2012.
Farmland investing offers very positive macroeconomic fundamentals
In a statement, Minaya emphasized that farmland offers an excellent portfolio diversification benefits to investors because of its low correlation to traditional asset classes like stock s and bonds. Farmland also offers a hedge against inflation.
Additionally, Minaya said, “The macroeconomic fundamentals for investing in farmland are very positive, and we view the launch of this new strategy as a testament to the ongoing potential and attractiveness of this asset class.”
TIAA-CREF has world-class agriculture platform
TIAA-CREF’s majority owned subsidiary, Westchester Group Investment Management is one of the leading farmland asset managers with more than 25 years of experience working with institutional investors on farmland asset class.
Westchester CEO Randall Pope said the firm has a “disciplined approach” that maximizes efficiencies and investment potentials of farmland assets.
On the other hand, Justin Biff Ourso, a senior agricultural portfolio manager at TIAA-CREF said the company has a world-class agricultural platform that provides unique access to an extended network of dedicated and experienced investment professionals in the agriculture industry.
