After focusing its investments in the U.S., Australia, and Brazil for the past 25 years, Illinois-based global agricultural investment group, Westchester Group, is seeking to expand its portfolio with the addition of farms in New Zealand, Poland, Ukraine, Chile, Argentina, and Peru according to group chief executive, Randall Pope.

 

Westchester, which buys farmland on behalf of superfunds and institutional investors, owns more than 500 farms, totaling more than 400,000 hectares and with a value in excess of $5 billion.

 

For years, Australia has been a focus for Westchester’s investments, with the group buying commercial-scale cropping, grape, cotton, and almond farms across four of the country’s states with a combined value of $900 million. In Western Australia the group has spent $120 million on wheat and grain farms, and two years ago the group spent nearly $20 million to buy the irrigated 17,200 hectare rice farm, Cobran Station, which the group converted to a cotton operation.

 

Now, after decades of focusing its investments on the U.S., Australian, and Brazilian markets, which generated a steady return of 12% per year for investors with approximately half of returns generated from capital growth and half from income from leasing the land, Westchester has now earmarked an additional $1.6 billion to fund the acquisition of farms in New Zealand, Poland, Ukraine, Chile, Argentina, and Peru.

 

Mr. Pope explains that Westchester is successful because it focuses on providing equity capital to owning farmland and to agriculture, but not to the operation of farming activity on the properties.

 

“We focus on what we do best,” Mr. Pope said. “Our core attitude is not to operate — we try and stay out of farming; all we are looking for is a hedge against inflation and ability to earn a reasonable return,” adding that investing in agriculture is a long-term and quite stable means of investment similar to Treasury bonds, which is significantly less volatile than the sharemarkets, making the space especially attractive to pension funds.