TIAA-CREF(**TICRX**), a leading financial services provider, has announced it is working in partnership with European and Canadian investment managers to form a global agricultural investment company to capitalise on the growing demand for agricultural products.The new company — TIAA-CREF Global Agriculture LLC — comprises several international investors and has committed to invest $2 billion in farmland in Brazil, Australia and the United States.
The U.S.-based TIAA-CREF(**TICRX**),is a financial services organisation with $487 billion in assets under management and a leading provider of retirement services in the academic, research, medical and cultural fields.TIAA-CREF(**TICRX**),is also a major agricultural investor in all key grain exporters, such as Brazil, Australia and the U.S.Last week’s announcement underscored TIAA-CREF’s expertise in global agricultural investment management. The companyalready manages about $2 billion in high-quality farmland, consisting of more than 400 properties totalling 600,000 acres, in major grain-producing regions, including Australia, Eastern Europe, South America and the United States, where TIAA-CREF partners with local farmers and operators to manage and farm the properties. What was further announced was that about 70 per cent of the $2 billion will be invested in land that grows annual crops like soybean and cotton and the remainder in land for permanent crops like almonds and apples.
!m(/uploads/story/75/thumbs/pic1_inline.png)The growing demand for agricultural products used for food, fuel and fibre is driving investmentsin farmland, said Jose Minaya, Managing Director at TIAA-CREF. Agricultural investments –previously avoided by many investors due to low liquidity in the secondary market, high capital requirements, long lock-up periods and required specialised knowledge — haveincreased lately.”We believe farmland offers investors excellent portfolio diversification given its low correlation to traditional asset classes like stocks and bonds. Farmland also acts as hedge against inflation within a portfolio,” Mr. Minaya explained commenting on the reasons for the significant raise in agricultural investments within TIAA-CREF Global Agriculture LLC.
Several like-minded institutions are among the investors that have decided to benefit from global farmland investments. The newly-formed TIAA-CREFGlobal Agriculture LLC includes the Second Swedish National Pension Fund, or AP2, one of the largest funds in northern Europe with about $32.1 billion under management. The company alsocounts among its investors British Columbia Investment Management Corporation, a $91.6 billion investment management company, and the Caisse de dépôt et placement du Québec, a pension fundsand insurance plans company, managingabout $161 billion.Last week’s statement did not cite the size of the investors’ individual allocations,but what has been announced is that TIAA-CREFF has a significant stake in the company, and a TIAA-CREF affiliate will manage the TIAA-CREF Global Agriculture LLC.
The newly-formed investment company underlies TIAA-CREFF continuing effort in global investments in agriculture. TIAA-CREF is a founding member of the Principles for Responsible Investment in Farmland, a group of international institutional investors that in September 2011launched farmland principles. They aim to improve accountability, transparency andsustainability of agricultural investments. TIAA-CREF (**TICRX**),is also a signatory to the United Nations Principles for Responsible Investment.