April 1, 2021

By Lynda Kiernan, Global AgInvesting Media

Kempen Capital Management, via its Fiduciary Management and Institutional Solutions team and the investment specialists of the Private Markets team, has 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). 

“Stichting Pensioenfonds PostNL is a forerunner in the field of sustainability and one of the first institutional investors in the Netherlands to include an allocation to global farmland with specific SDG objectives in their real assets portfolio,” said Wilse Graveland and Michel Iglesias del Sol, Fiduciary Managers for Stichting Pensioenfonds PostNL.

Through the SDG Farmland Fund, the three 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.

“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. “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.

“With the help and support of Kempen, our fiduciary manager, we critically reviewed all options for implementation in the past year. Based on the outcome of this screening, we have selected three investments, including the initiative to leverage the SDG Farmland Fund to make an active, positive contribution to the achievement of both our investment goals and our sustainable development goals.”

 The Netherlands-based fund, which will be managed by Kempen’s Private Markets team, including portfolio managers Richard Jacobs and Edzard Potgieser, has been launched with €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 Australia and New Zealand. 

“Investing in agricultural land is a good alternative for pension funds besides investing in unlisted real estate,” said Graveland and Iglesias del Sol. “The return on investments in farmland comes from strongly varying underlying factors such as productivity growth, climate, and food prices. In evaluating all the implementation options within farmland, we see that there is a lot of room for further development when it comes to sustainability. The SDG Farmland Fund offers a bespoke solution that allows clients to impact the actual selection of investments, a solution that reaches far beyond what is currently available on the market in terms of sustainability.”

The fund will invest in both annual crops such as cereals, grains, and vegetables, along with permanent crops including fruits and nuts. Together with its geographic mandate, fund managers Jacobs and Potgieser stated these parameters will allow them to achieve optimal diversification for its structured portfolio.

“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. “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.”

– Lynda Kiernan 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@globalaginvesting.com.