Arable Acreage for Alternative Assets

Timberland, Farmland, and Agricultural Investments

Timberland, farmland, and other agricultural assets are increasingly drawing the attention of long-term investors such as pension funds. These assets are still categorised as alternatives, due to their illiquidity, high barriers to entry, and the additional legal/operational knowledge required to manage them, yet their positive risk/return characteristics and low correlation to traditional asset classes may outweigh the aforementioned concerns.

This short list includes several significant studies, such as GIIN's survey of the impact-oriented performance characteristics of over 600 agricultural investments, and the World Bank's take on the suitability of forestry investments for the pension fund industry. Other papers discuss deforestation, water risks, and an in-depth look at almond orchards.

Farmland for Institutional Investment (Nuveen, 2021)

The authors discuss the process of screening the world's total acreage of farmland down to a universe of assets that is well-suited for institutional investment. This process is complex and involves several considerations.

Appetite for Change: Food, ESG, and the nexus of nature (Invesco, Feb 2021)

For compliance reasons, this paper is only accessible in certain geographies

The process of making food production and consumption more sustainable involves the application of ESG principles and environmental considerations. Invesco describes how the 'nexus of nature' has ripple effects throughout many industries and involves concerns as broad as deforestation, pollution, climate change, and the health of humanity.

Resources in 2021: A year of transformation (Janus Henderson, Mar 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

This brief overview of sectors focuses on commodities including an update on soft commodities and the agriculture sector, oil and the energy sector, and metals for the mining sector.

Sovereign Sustainability Topics: Deforestation (Candriam, 2021)

Candriam reports on deforestation which is one of the issues monitored within the ‘Natural Capital’ pillar of their Sovereign Sustainability Model. Surprisingly, deforestation issues are not unique to emerging markets and are very apparent in Canada, Australia, and the United States.

Timberland and Farmland: Complementary investment attributes (Manulife IM, 2020)

For compliance reasons, this paper is only accessible in certain geographies

Manulife Investment Management presents the case for timberland and farmland investments. Their positive risk/return characteristics and low correlations to traditional asset classes could be beneficial attributes for long-term institutional investors.

Pension Fund Investment in Forestry (World Bank, 2021)

The World Bank presents this 66-page analysis of the timberland and forestry industry, specifically for global pension fund investors.

Understanding Impact Performance: Agriculture investments (GIIN, 2020)

Who better to advise on the impact-related performance of investments within the agricultural industry than GIIN? This detailed study by the Global Impact Investing Network looks at the impact of 661 agricultural investments within 46 countries over a seven-year period.

Water Risks in Real Assets (PGIM IAS, Feb 2021)

PGIM Institutional Advisory & Solutions details some of the water risk considerations within several industries including agriculture, natural resources, energy, and infrastructure.

An Analysis of Almond Orchard Investments (Nuveen, 2020)

Westchester Group, a subsidiary of Nuveen, examines the dynamics of almond orchards including historical cycles of almond prices, factors that determine the valuation of almond orchards, and other investment considerations.