October 7, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Two leading insurance companies, Coöperatie DELA and De Goudse, have invested a total  €150 million (US$173.45 million) in the Kempen SDG Farmland Fund, helping the fund reach €350 million (US$404.7 million) in capital commitments in the six months since its launch. 

It was in April of this year when Kempen Capital Management, via its Fiduciary Management and Institutional Solutions team and the investment specialists of the Private Markets team,  partnered with Stichting Pensioenfonds PostNL to launch the SDG Farmland Fund – a new investment solution to offer institutional investors global access to farmland as an asset class while also contributing to the achievement of UN Sustainability Development Goals 2 (zero hunger), 6 (clean water and sanitation), 12 (responsible consumption and production), 13 (climate action), and 15 (life on land). 

“Sustainability and innovation are important ground principles of our investment policy,” said René van de Kieft, chairman of Stichting Pensioenfonds PostNL and member of the investment committee, upon the fund’s launch in April of this year. “An asset allocation towards farmland offers us a potentially attractive return on investment as well as further diversification within our investment portfolio.”

“The asset class of ‘agricultural land’ is pre-eminently suited to deliver a positive contribution to the pension fund’s sustainability goals. Particularly in the field of climate change and biodiversity, there is room for great progress and we, as a pension fund, would like to make an active contribution towards this goal,” continued van de Kleft.

The Netherlands-based fund, which will be managed by Kempen’s Private Markets team, including portfolio managers Richard Jacobs and Edzard Potgieser, was launched with an initial  €200 million (US$235.5 million) in seed capital to invest specifically in sustainable and regenerative agricultural practices in OECD (Organisation for Economic Co-operation and Development) countries situated in North America and Western Europe, as well as Oceania, including Australia and New Zealand.

Through the SDG Farmland Fund, the founding partners aim to offer attractive return on investment while actively promoting a fundamental shift toward greater sustainability in food production. To quantify this achievement they have identified concrete and measurable indicators (KPIs) in climate change, soil health, biodiversity, water quality, and resource allocation.

“Besides the returns and the ecological aspects of this fund, we feel that the social factor is very important as well,” noted Richard Jacobs and Edzard Potgieser, portfolio managers, SDG Farmland Fund. “By investing in this fund, we enable young farmers to use new capital to achieve their long-term sustainability goals. We are very pleased to be able to welcome Coöperatie DELA and De Goudse as investors, after they have thoroughly investigated our philosophy, processes and procedures, and our approach. We look forward to engaging in a dialogue with these clients in order to discuss how we can proceed together and take further steps in the field of sustainability.”

Included in the fund’s portfolio are operations growing a range of both permanent and row crops including avocados, olives, and almonds in Australia, Portugal, New Zealand, and the U.S., along with annual crops such as grains, beans, and vegetables in Denmark, the U.S., and Australia.

“With this fund, we enable investors to team up with local farmers to promote and facilitate a significant shift towards farmland sustainability,” said Jacobs and Potgieser in April. “These agricultural investments will enable us to help clients such as Stichting Pensioenfonds PostNL to implement concrete, measurable sustainability goals that will significantly contribute to a sustainable food chain.”

Commenting on Coöperatie DELA’s decision to back the fund, Frank Eizinga, chief investment officer said,  “We are further diversifying our portfolio while at the same time contributing towards the achievement of our sustainability goals. What attracts us the most in the Kempen SDG Farmland Fund is that a sustainability plan is drawn up for each investment, making the sustainable goals concrete as well as creating accountability for the achievement of the goals.”

Seeking out sustainable agriculture as a portfolio diversification was a common driver among the investors of this round.

“As a family business, we attach great value to sustainable business practices,” said Pieter de Frel, chief financial risk officer, De Goudse Verzekeringen. “This investment, which is fully grafted onto sustainability and entrepreneurship, will enable us to contribute to a healthy climate and biodiversity. In addition, we consider farmland an attractive diversifier in our portfolio.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.