Authors
Jim McCandless Daniel Murray

Highlights

As a top-performing asset class for about a century, farmland has proven time and again to have upside growth potential and to be resilient throughout various economic scenarios. It is an essential global property sector tied to food production. Jim McCandless and Daniel Murray, co-CIOs for farmland at ÃÛ¶¹ÊÓƵ Asset Management, discuss why more investors are looking to add farmland into their investment portfolios. 

What does farmland offer to clients?

As an income-producing and finite natural resource, farmland represents around USD 9 trillion globally.1 In the US alone, it is a more than USD 3.4 trillion market.2 Farmland’s historically high returns and low volatility, together with a growing global population and limited high-quality land supply, mean the demand for farmland has increased over time.

We were one of the first firms to invest in farmland on behalf of pension funds, starting in 1990. Today, we are one of the leading managers of institutional farmland investment portfolios in the US. Our experience in US agricultural real estate, however, dates back to the early 1970s. We specialize in the acquisition, management and disposition of agricultural real estate investments.

We offer investors an opportunity to invest in farmland through strategies that invest in high-quality, income-producing agricultural properties, diversified across the prime farming regions of the US. Our team of seasoned professionals evaluates opportunities to ensure our clients’ portfolios hold high-quality farm assets.

What role can farmland play in an investor’s portfolio?

Historically, there have not been many ways to access this asset class, and farmland has been a huge missed opportunity. Many investors still think it is only a place for food production, as opposed to an investment property sector. Farmland combines passive cash flow, appreciation that outpaces inflation and less volatil¬ity than other property sectors. We believe it can be a powerful diversifier and inflation hedge within an investment portfolio due to its returns being negatively correlated with equities and bonds, and its positive cor-relation with inflation. Time and again, it has proven to be a sector that generates attractive income with low volatility, which is evidenced by past major economic crises. Lastly, farmland can help to build a balanced portfolio.

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