February 15, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Within days of each other, two major U.S. pension funds committed capital exceeding $500 million to ag-focused investment funds. 

The Los Angeles County Employees Retirement Association (LACERA) has deployed a total investment of $456 million to TIAA-CREF Global Agriculture Funds, committing $191 million to TIAA-CREF Global Agriculture, and another $265 million to TIAA-CREF Global Agriculture II through secondary purchases. 

TIAA-CREF launched its Global Agriculture Unit, which focuses on agricultural investments and farmland in the U.S, Australia, and Brazil, in 2011 and closed in May 2012 with capital commitments totaling $2 billion, surpassing its initial funding goal of $1.5 billion. Managed by TIAA affiliate Teachers Advisors, Inc., initial institutional investors in the fund included AP2, British Columbia Investment Management Corporation, the Caisse de dépôt et placement du Québec (Caisse), and others. 

At the time, Jose Minaya, managing director and head of global natural resources and infrastructure investments at TIAA-CREF, commented, “We see increased protein consumption in developing economies and alternative energy mandates driving increased demand for food, fiber and fuel from a limited resource – land. Direct investment in farmland provides access to the key driver of food production. In addition, we believe sustainable land management is imperative to help create value over the long term, and we employ best practices across our portfolio accordingly.”

Just two years later, in 2014, building on the success of Global Agriculture I, TIAA-CREF secured commitments of US$1.4 billion for its Global Agriculture II fund from three limited partnerships according to a document filed with the U.S. Securities and Exchange Commission. This second fund eventually closed with $3 billion in capital in August 2015, exceeding its initial target of $2.5 billion – no doubt, boosted by an investment of $750 million the previous year from AP2. 

Now overseen by TIAA-CREF’s investment manager Nuveen, working together with Westchester, these funds focus on sustainability, conservation of resources, and social justice under new ESG KPIs, part of its new ESG Framework designed to replace the original guidelines developed in 2013.

The latest progress reporting can be found in the TIAA/Nuveen/Westchester 2021 Farmland Report.

Louisiana Teachers and PGIM

Within days of the LACERA investment, the Teachers’ Retirement System of Louisiana (TRSL) approved a $50 million allocation to PGIM’s US Agriculture Fund. 

In April of last year, PGIM’s Agriculture Fund stood at $400 million when it decided to open the fund to third-party investors to raise $600 million and convert the vehicle to an open-ended structure.

Including assets spanning row crops such as corn, rice, cotton, and soybeans, along with permanent crops like nuts and citrus orchards, the net asset value of the fund stood at $427 million as of Q3 2021. 

Once opened to third-parties, the Washington State Investment Board (WSIB) was considering committing $100 million to the fund, and was one of a small number of institutional investors approved to buy-in. Later that year, the Arkansas Public Employees Retirement System (APERS) also committed $50 million to the fund.

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– 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.