By Lynda Kiernan
The Global Sustainable Farmland Income Trust (GSFI), the UK’s first farming-focused trust, is aiming to raise $300 million through a float on the London exchange to fund investments in farming operations across the U.S., Europe, New Zealand, Australia, and select regions of Latin America.
These investments will be made under the fund’s mission, which “aims to generate capital growth over the long term by investing in a diversified global portfolio, primarily consisting of Private Market Investments, which aims to create positive measurable environmental and social impact,” according to a recently released prospectus.
Investors will be able to gain exposure through an offering of up to 300 million shares at $1 per share, and expectations that the fund will be fully committed in 18 months, and fully invested in 36 months, according to the prospectus. Once fully invested, the fund will be targeting between 6 and 8 percent net total return per annum.
If the float is successful this coming February, the fund will then make 18 initial planned investments in farming operations valued at $330 million, ranging from nut orchards in California, to European fruit acreage. The portfolio will aim for a diversity of capital allocation across annual and permanent crops, grasslands, woodlands, and specialty crops, and once these planned acquisitions are closed, there remains another dozen in the pipeline.
“Farmland is a compelling asset that has been used and invested in by a lot of institutional investors throughout the ages – it was the first real asset that the Crown used to own,” said Sven Miserey, one of the fund’s investment manager.
All assets will be leased to tenant farmers, and will be regularly audited to ensure each operation is meeting environmental and social benchmarks as laid out by the UN’s Sustainable Development Goals (SDGs), which the firm says helps “connect investors to outcomes”.
“Our properties will be independently reviewed each year against…globally recognized standards for sustainability covering all areas of farming operations, or other recognized equivalent standard,” said David Gray, chairman, GSFI. “Adherence to these high standards will ensure that we produce on our farms food and other crops with operations that reflect evolving best practice and concern for the environment.”
The UN”s 2030 Agenda for Sustainable Development includes 17 Sustainable Development Goals (SDGs) aligned with three key issues: climate change, inequality, and sustainability in production and consumption. By using these goals as a framework, asset managers, which globally oversee $80 trillion in AUM, can not only generate positive change on both society and the environment, but can drive the long-term value of assets on behalf of their investors.
Impact and socially responsible investing has gained serious traction in recent years, however, the UN estimated that there remains a $2.5 trillion (with a “t”) funding gap per year between current impact investing levels and what is needed to achieve the UN’s Sustainable Development Goals (SDGs) in emerging countries alone.
Meanwhile, real assets have been gaining traction with investors, according to PwC, which forecasts that investments in alternative assets will top $13.9 trillion by 2020. And within this class, farmland is uniquely positioned, gaining value in both land appreciation, as well as through crops sold. Compounding this, there are socio-economic shifts taking place, giving rise to larger populations, higher average household incomes, and shifting dietary demands.
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.