The $9 billion Michigan Municipal Employees’ Retirement System (MERS) is expanding its $1 billion allocation to real assets by 30% over the next three years and is expanding its investments into Australian almonds, sheep and cattle. Australia is the largest almond producer in the Southern Hemisphere and is the world’s third largest producer of beef and the world’s second largest producer of sheep. MERS has taken note of the spike in demand for almonds causing a price increase and price increases for Australian livestock which has been seeing a tightening of supplies due to drought. MERS’ real asset allocation which was created in January and includes investments in timber, real estate, and infrastructure is expected to grow by $100 million per year through 2017 investing in non-U.S. opportunities. In February MERS paid $60 million for a 45% stake in 18,000 hectares of Olam almond orchards in Victoria, Australia, and the fund has committed $180 million to Pastoral Fund Management of Queensland, having invested the first $60 million of the commitment to date.
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