Content Includes: Preqin Special Report: Agriculture Fundraising September 1 Agriculture funds have experienced two consecutive years of strong fundraising. Fund Managers Almost two-thirds of agriculture fund managers are based in North or. Assets under Management AUM of unlisted agriculture funds now tops $bn. Investors Public pension funds represent the largest proportion of institutional investors in agriculture. alternative assets. intelligent data.
Preqin Special Report: Agriculture Download the data pack: Foreword Agriculture has attracted greater levels of interest from institutional investors in recent years, as they seek to diversify their portfolios and position themselves to take advantage of growing demand for food arising from global population growth and increased consumption by the emerging middle classes in developing countries. A number of investors have sought to gain access to the sector through investment in farmland, agricultural businesses or companies looking to generate innovative technological solutions to agricultural problems (otherwise known as AgTech). In this report, we take a look at the growing market of unlisted funds providing investors with access to the sector, fundraising, assets under management (AUM) and institutional investor interest. Over 1 unlisted agriculture/farmland-focused funds have closed since, raising approximately $bn in aggregate capital. Fundraising has been particularly strong recently: 1 funds closed in 1 securing an aggregate $.9bn in investor capital, close to the record $.bn in 1. As a result, AUM currently stands at $.bn, and dry powder increased signifi cantly from $1.bn in to $9.bn in 1, before falling slightly to $.bn in December 1 as fund managers put capital to work. Developments have not been solely positive for the agriculture/farmland managers; these managers have set ambitious targets for fundraising and have tended to come in below target in recent years. Nevertheless, there remains a strong pipeline of funds coming to market, with vehicles targeting $1.9bn, and investors continue to express an interest in the sector, with % of natural resources investors tracked by Preqin investing in agriculture/farmland. Preqin s Natural Resources Online database is an essential source of data and intelligence on the unlisted natural resources fund industry, covering agriculture/farmland, energy, metals & mining, timberland and water. To fi nd out more about this and Preqin s other services, please visit www.preqin.com or contact us at info@preqin.com. Key Facts $.9bn Capital raised by the 1 agriculture/farmland-focused funds closed in 1, close to the record $.bn in 1. $.bn Assets under management (AUM) of agriculture/farmland-focused funds as at 1 December 1. 9% Proportion of investors in agriculture/farmland that are open to land-owner-focused opportunities. % Proportion of investors with a preference for agriculture/farmland funds that would invest in AgTech. Contents Fundraising Fund Managers Assets under Management and Performance Investors All rights reserved. The entire contents of Preqin Special Report: Agriculture, September 1 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Special Report: Agriculture, September 1 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent fi nancial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Special Report: Agriculture, September 1. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confi rm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Special Report: Agriculture, September 1 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Special Report: Agriculture, September 1 or for any expense or other loss alleged to have arisen in any way with a reader s use of this publication. 1 Preqin Ltd. / www.preqin.com
Download the data pack: Preqin Special Report: Agriculture Fundraising Preqin s Natural Resources Online tracks over 1 unlisted agriculture/ farmland-focused funds closed since, which have raised just over $bn in aggregate capital. The highest number of funds closed was in 1, when 1 funds secured $1.bn, although the annual capital raised peaked the following year, when 1 funds raised $.bn (Fig. 1). Agriculture/farmland fundraising as a proportion of all natural resources fundraising peaked at.% in both and 1, and stood at.% in 1 (Fig. ). A substantial proportion of agriculture/ farmland investment is directed towards North. Among the agriculture/ farmland-focused funds closed since 11, funds with a primary focus on North have raised $.bn, or % of total capital raised (Fig. ). Signifi cant sums were also raised by diversifi ed multi-regional funds, which seek to spread crop and investment risk by investing across multiple geographies: seven funds raised $.bn. Outside North, the largest sums of capital have been raised by funds with a primary focus on Asia ($1.bn) and Australasia ($1.bn). As the sector is still relatively new and growing, fund managers are having diffi culty attracting institutional capital; agriculture/farmland-focused funds have typically closed below their initial fundraising target in recent years, with the average fund closed in 1 securing % of its target, rising to 9% in 1 (Fig. ). Nevertheless, some funds have been oversubscribed and closed signifi cantly above target: Fig. 1: Annual Unlisted Agriculture/Farmland-Focused Fundraising, - 1 YTD (As at July 1) Fig. : Unlisted Agriculture/Farmland-Focused Fundraising as a Proportion of All Natural Resources Fundraising, - 1 YTD (As at July 1) 1 1 1 1 1.. 1.. 1 1. 1. 1. 1 1. 1 1..9 9 1 11 1 1 1 1 1 YTD No. of Funds Closed Year of Final Close Aggregate Capital Raised ($bn). Proportion of Unlisted Natural Resources Fundraising % % % % % % % 1% %.%.%.% 1.%.%.%.%.%.%.% 1.% 9 1 11 1 1 1 1 1 YTD Year of Final Close Fig. : Unlisted Agriculture/Farmland-Focused Fundraising by Primary Geographic Focus, 11-1 YTD (As at July 1) Fig. : Average Proportion of Target Size Achieved by Unlisted Agriculture/Farmland-Focused Funds, 11-1 YTD (As at July 1) 1 1. North. 1 11 1. 1. 1. 1.. Asia Australasia Latin Middle East & Israel Africa. Diversified Multi- Regional Proportion of Target Size Achieved 1% 1% % % % % 1% % % 9% 9% % Primary Geographic Focus No. of Funds Closed Aggregate Capital Raised ($bn) % 11 1 1 1 1 1 YTD Year of Final Close 1 Preqin Ltd. / www.preqin.com
Preqin Special Report: Agriculture Download the data pack: TIAA Asset Management raised $bn for TIAA-CREF Global Agriculture II in July 1, exceeding its initial $.bn target. The fund will invest in highquality farmland across multiple crops and regions, including the US, Australia, Brazil, Chile and New Zealand. This made it the largest agriculture/farmland fund closed in the last 1 years, ahead of its predecessor fund, TIAA-CREF Global Agriculture, which closed in May 1 on $bn (Fig. ). Fundraising has slowed in 1 so far, with fi ve funds raising approximately $.bn in aggregate capital. However, the pipeline for agriculture/farmlandfocused funds is strong, with funds in market, targeting $1.bn in aggregate capital (Fig. ). Sixteen of these primarily focus on North, targeting $.bn in aggregate capital. Outside North, the largest amount of capital is being sought for Africa, with fi ve funds targeting $.bn. Fig. : Unlisted Agriculture/Farmland-Focused Funds in Market by Primary Geographic Focus (As at July 1) 1 1 1 1 1 1. North. Asia 1.1 No. of Funds Raising Africa. Australasia 1. Primary Geographic Focus. Latin. Middle East & Israel Aggregate Target Capital ($bn). Diversified Multi- Regional Fig. : 1 Largest Unlisted Agriculture/Farmland-Focused Funds Closed since (As at July 1) Fund Firm Headquarters Fund Size (mn) Final Close Date Geographic Focus TIAA-CREF Global Agriculture II TIAA Asset Management US, USD Jul-1 Global TIAA-CREF Global Agriculture TIAA Asset Management US, USD May-1 Global NCH Agribusiness Partners NCH Capital US 1, USD Dec- Central & East Paine & Partners Capital Fund III Paine & Partners US 1, USD Apr- Global Altima One World Agriculture Development Fund Mahaseel Agricultural Investment Fund Altima Partners UK EUR Nov- Global Kenana Agriculture Sudan 1, USD Nov-1 MENA Paine & Partners Capital Fund IV Paine & Partners US 9 USD Dec-1 Global Macquarie Pastoral Fund Macquarie Infrastructure and Real Assets (MIRA) UK AUD Apr-11 Australia Black River Food Fund Proterra Investment Partners US USD Nov-1 AMERRA Agri Fund II AMERRA US USD Jan-1 Fig. : Notable Unlisted Agriculture/Farmland-Focused Funds in Market (As at July 1) Fund Firm Headquarters Emerging Markets North, Latin Target Size (mn) Geographic Focus U.S. Farming Realty Trust III International Farming Corporation US 1, USD US Danish Agribusiness Fund IFU Denmark, DKK Global CITIC Modern Agricultural Industrial Investment Fund Guangdong Haid Group China, CNY Asia AMERRA Agri Fund III AMERRA US USD North, Latin Food and Agriculture Fund ICD Asset Management Saudi Arabia USD Global Laguna Bay Agricultural Fund I Laguna Bay Pastoral Company Australia AUD Australasia AMERRA Agri PE Fund AMERRA US USD Global Brookfi eld Agricultural Fund II Brookfi eld Asset Management Canada USD Brazil TIAA Agribusiness Fund I TIAA Asset Management US USD Global ACM Permanent Crops Fund II Equilibrium Capital Group US USD US 1 Preqin Ltd. / www.preqin.com
Download the data pack: Preqin Special Report: Agriculture Fund Managers While many agriculture/farmland-focused funds have a broader geographical remit than other private equity vehicles, due to the availability of agricultural opportunities, fund managers running these vehicles continue to be concentrated in the developed markets of North (% of managers) and (%, Fig. ). The largest fund manager by capital raised for unlisted agriculture/farmland funds in the last 1 years is TIAA Asset Management, the asset management arm of the Teachers Insurance and Annuity Association, which has secured $bn for two funds investing in farmland, including $bn for TIAA-CREF Global Agriculture II, the largest agriculture/farmland-focused fund closed to date (Fig. 9). Data Source: Natural Resources Online contains detailed information on more than 1 fund managers with exposure to agriculture/ farmland investment. www.preqin.com/nro Fig. : Natural Resources Fund Managers that Invest in Agriculture/Farmland by Region North % % Middle East & Israel % Asia 11% Africa 9% Latin % Australasia % Fig. 9: 1 Largest Fund Managers by Aggregate Capital Raised for Unlisted Agriculture/Farmland Funds in the Last 1 Years Firm Headquarters Total Funds Raised in Last 1 Years ($bn) No. of Funds Raised in Last 1 Years No. of Funds Currently in Market TIAA Asset Management US. 1 Paine & Partners US.1 Proterra Investment Partners US 1.9 Macquarie Infrastructure and Real Assets (MIRA) UK 1. NCH Capital US 1. 1 Altima Partners UK 1. 1 Kenana Agriculture Sudan 1. 1 AMERRA US. BRZ Investimentos Brazil. 1 Blue Road Capital US. 1 1 Preqin Ltd. / www.preqin.com
Preqin Special Report: Agriculture Download the data pack: Assets under Management and Performance Agriculture/farmland assets under management (AUM), which includes capital committed but not yet called up (dry powder) and unrealized portfolio value, stood at $.bn as of December 1 (Fig. 1). This represents % of overall natural resources AUM, which is dominated by energy-focused funds (%). Fig. 1: Unlisted Natural Resources Assets under Management by Primary Strategy (As at 1 December 1).. 9. 1. 1. Diversified Natural Resources Water Agriculture/farmland-focused dry powder increased signifi cantly from $1.bn at the end of to $9.bn by the end of 1 (Fig. 11). This declined over the following year to $.bn as fund managers found attractive opportunities to put capital to work. This was particularly prominent among North -focused funds, for which dry powder fell from $.bn in December 1 to $.bn in December 1 (Fig. 1). Meanwhile, dry powder focused outside North, and Asia, which had increased from $.bn in December 1 to $.bn in December 1, fell to $.bn by the end of 1. 1 1 Fig. 11: Unlisted Agriculture/Farmland-Focused Dry Powder, December - December 1 1..... 1. Dry Powder ($bn) 1. Unrealized Value ($bn) Metals & Mining Timberland Agriculture/Farmland Energy Fig. 1: Unlisted Agriculture/Farmland-Focused Dry Powder by Primary Geographic Focus, December 1 - December 1 Dry Powder ($bn) 1 9 1 1.......9. 9.. Dry Powder ($bn) 1 North Asia Rest of World Dec- Dec- Dec- Dec-9 Dec-1 Dec-11 Dec-1 Dec-1 Dec-1 Dec-1 Dec-1 Dec-1 Dec-1 Dec-1 Fig. 1: Notable Unlisted Agriculture/Farmland-Focused Fund Performance Fund Firm Vintage Fund Size (mn) Geographic Focus Net IRR (%) Date Reported Ag Real Value Fund Teays River Investments 1 USD US 1. Dec-1 Bonnefi eld Canadian Farmland I Bonnefi eld Financial 1 1 CAD Canada 1. Dec-1 Bonnefi eld Canadian Farmland II Bonnefi eld Financial 1 CAD Canada 11. Dec-1 Black River Capital Partners Fund (Food) Proterra Investment Partners 11 USD Emerging Markets 9. Dec-1 Avrio Ventures II Avrio Ventures 11 91 CAD North 9. Sep-1 1 Preqin Ltd. / www.preqin.com
Download the data pack: Preqin Special Report: Agriculture Investors Preqin s Natural Resources Online tracks over, investors in natural resources, with over a quarter (%) of these investors expressing a preference for investing in agriculture/farmland (Fig. 1). The largest proportion (%) of institutional investors in agriculture are public pension funds, followed by endowment plans (1%), foundations (1%) and private sector pension funds (1%, Fig. 1). Investors are most likely to allocate to agriculture/farmland investments from their real assets (% of investors), natural resources (1%) or private equity allocations (1%, Fig. 1). Only % of investors have a separate allocation to agriculture/farmland. Among investors that expressed a preference for the type of business model they would take through their investments, 9% would be open to a land owner approach, % to an owner-operator approach and 9% to an operator approach (Fig. 1). Two-thirds of investors would invest in AgTech, businesses developing technological solutions to modern agricultural problems. Most investors are open to investing in a range of agricultural commodities, with 9% open to investing in annual/row crops, % in perennial/ permanent crops and % in livestock. Fig. 1: Institutional Investors in Natural Resources by Strategy Preference Fig. 1: Institutional Investors in Agriculture/Farmland by Type Proportion of Investors 1% 9% % % % % % % % 1% % % Agriculture/ Farmland % Energy % Metals & Mining % Timberland 1% Water % % % % % 1% % 1% 1% Public Pension Fund Endowment Plan Foundation Private Sector Pension Fund Family Office Government Agency Asset Manager Investment Company Other Strategy Preference Fig. 1: Institutional Investors in Agriculture/Farmland by Source of Fig. 1: Institutional Investors in Agriculture/Farmland Investor: Process/Stage and Commodity Preferences % % % 1% 9% 1% % % Separate Part of Real Assets Part of Natural Resources Part of Private Equity Part of Infrastructure Part of Real Estate General Alternatives Other Proportion of Investors 1% 9% % % % % % % % 1% % 9% Land Owner % Owner- Operator 9% Operator Process/Stage % AgTech 9% Annual/ Row % % Perennial/ Permanent Commodity Livestock 1 Preqin Ltd. / www.preqin.com
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