Of the $2.5 trillion worth of U.S. farmland, only 0.4% is owned by investment funds but farmland and timberland are garnering more attention from investors as stock reach record highs and rising interest rates could hurt bonds. Land also provides an income stream through cash rents or sales of tree to the paper or furniture industries. It is counter-cyclical to other investments such as stocks and will typically increase in value as price throughout the broader economy increase. In 2013 farmland returned 20.9% and timberland returned 9.8% and over the past 20 years farmland returned an average of 12.5% per year and timberland 8.3% according to the National Council of Real Estate Investment Fiduciaries (NCREIF) of Chicago. U.S. Trust Specialty Asset Management Group of Bank of America is currently hiring to round out its farmland and timber investment groups to meet client demand. U.S. Trust currently has more than $1 billion invested in farmland with an additional $170 million waiting to be invested, and currently has $300 million invested in timber with an additional $215 million waiting to be invested. American Timberland of South Carolina is looking to raise a new fund of between $100 – $200 million. Last year, American Timberland’s existing fund returned 24.2%.
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