Friday, August 22, 2014

Family Offices Showing Greater Appetite for Agriculture/Farmland Than Institutions

From farmlandgrab:

Poll: family offices show greatest agri appetite 
Family offices are showing the greatest appetite for agri exposure, according to a poll of 99 Agri Investor readers.

Some 33 percent of pollsters voted that family offices were showing the greatest appetite for the asset class, while 31 percent pointed to institutional investor demand. High net worth individuals and development finance institutions are showing less interest in the asset class according to 23 percent and 11 percent of respondents, respectively.

Luba Nikulina, global head of private markets at Towers Watson, the investment consultant, was not surprised by the results and pointed to nervousness from institutional investors in the past.

“[Agriculture] has matured quite a bit as an asset class and there has been an increased interest over the last two years,” she told Agri Investor. “Geographically, the country risks vary between developed and emerging markets. A priority for institutions is finding ways of mitigating risk, while taking advantage of the better returns that agriculture offers, and that comes down to investors wanting to have clear investment strategies when investing into agriculture. There are ways to mitigate operational risks but there are other risks involved in owning and operating agricultural projects, so these risks have to be balanced,” she told Agri Investor.

Family offices have provided an appealing starting point for several agri investment managers during their initial rounds of capital raising and many describe them as frontrunners in the growing asset class, such as Miro Forestry that has raised $20 million of a $50 million target purely from private capital.

First time fund, Ascent Africa, received all of its commitments from family offices based in Europe and Asia, aside from two, which were Kenyan pension funds. Cocoa producer Agro Nica Holdings, recently closed a fundraising round populated by family offices, and is now approaching institutions for the next round of financing. And some family offices have invested into agri proactively, hiring their own asset manager, or established a third party fund to invest alongside others such as the $2 billion Kattegat Trust and Sherpa Asset Management respectively....MORE 
Former hedgefunder turned family office manager George Soros