Alternative Outlook

Some of the world’s biggest pension funds said they have been ploughing money into farmland around the world as they seek to diversify portfolios and generate stable returns at a time of market volatility.

At an agriculture investment summit in London on Wednesday, leading U.S. and European pensions funds said few assets remained immune from whipsawing markets, prompting institutions to look at farmland.

“The crisis has accelerated our agriculture program,” said Jose Minaya, head of natural resources and infrastructure investments…

Pension funds are increasingly attracted to forestry investments because of their low correlation with equity and bond markets, and because of the inflation hedge they offer, according to fund managers and investors.

But the novelty of the asset class – and the relatively limited allocations to alternative assets in general – means take-up of forestry remains slow, say investment managers. “We have lived through extraordinary times for investors,” Hugh Humfrey, managing partner, Timberland Investment Resources (TIR) Europe, to…

Investor interest in agriculture is continuing to rise and investment experts expect to double assets under management in the next three years, according to a survey.

But several factors, including the lack of transparency of this still-emerging asset class, are making some investors skittish. “That is one of the main issues,” said Bill Kiernan, director of research for global agriculture investment at consulting firm HighQuest Partners. “The whole idea of investing into agriculture as a sector … is really pretty new and it has been growin…

Agriculture is a challenging investment with great potential, according to consulting firm bfinance.

The reason: Rising food prices, agricultural land’s long-term inflation-linked characteristics, and low correlation to most asset classes are driving renewed interest in agriculture as an investment class.

However, according to bfinance, agricultural stocks are volatile, largely due to the fact that commodity ownership involves storage, ownership costs, and risks. “Commodity index funds are cheap and easy, but have a high correla…

Bloomberg reports that Farmland investments may return an average of 8 percent to 12 percent annually as global food demand increases, said the largest U.S. pension manager for teachers and academic researchers with $469 billion of assets.

The company has $2.5 billion invested in farmland and owns about 600,000 hectares (1.48 million acres) mostly in the U.S., Brazil and Australia, said Jose Minaya, 40, a managing director and head of natural resources and infrastructure investments at New York-based TIAA-CREF.

“From a historical point …