Follow on Google News News By Tag Industry News News By Place Country(s) Industry News
Follow on Google News | Will Political Risk be a Key Return Determinant in Farmland Investments?Political pressures to increase restrictions on foreign ownership of farmland have been rising in popular agriculture investment markets such as Australia and New Zealand, in addition to large emerging markets such as Brazil and Argentina.
By: Agcapita Stephen Johnston, founder of Agcapita Partners LP, a Canadian farmland investment fund, commented that "Agcapita believes that political risk will be a key determinant of the returns to agriculture investments hence our focus on a stable market like Canada. Foreign governments and institutional investors have only recently been moving into the space and in a very limited way and yet they have already generated considerable controversy and political backlash where they have deployed capital into the emerging markets. We believe that this will only become worse over time as the issues of domestic food security and foreign control move onto the political agenda." Agcapita’s series of farmland funds continue to show great appeal to conservative investors concerned with inflation and the volatility of their existing public equity investments. Farmland has similar inflation hedging qualities to gold but with an ongoing cash yield that gold lacks. Farmland returns exhibit low volatility and this combined with the high absolute returns from farmland equate to a favorable Sharpe ratio. Agcapita’s funds directly hold diversified portfolios of farmland in western Canada, and in particular in the highly price competitive province of Saskatchewan. Investors are provided with the comfort of a direct investment in farmland combined with a model of front-end loaded cash rents. Agcapita believes farmland is a safe investment, that supply is shrinking and that unprecedented demand for "food, feed and fuel" will continue to move crop prices higher over the long-term. Agcapita is one of Canada's most experienced farmland fund managers, launching its first fund in Q1 2008. This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," End
Account Email Address Account Phone Number Disclaimer Report Abuse
|
|