Insight is proposing to leverage the accumulated experience and knowledge of its farmland business by evolving its farm investment management.
Watch our video to hear Mark Stancombe, Member of the Executive Management Committee; and Detlef Schoen, Head of Real Assets, discuss farmland as an investment opportunity.
Why Insight for farmland?
The strategy aims to capture the benefits of agriculture as an asset class by providing:
- Regular cash income and capital growth with inflation hedge: Targets 4% annual cash distribution and 8% IRR, net of fees and taxes1
- Diversification: In addition to diversification away from traditional asset classes (equities and bonds), diversification across products and geographies – with as much diversity as required while maintaining ’critical mass’
- A measurable and audited ESG commitment: Alignment with the UN Sustainable Development Goals and audited environmental, social, and governance metrics
- Scale : Building out from existing ‘bridgeheads’ in key target geographies, using aggregation and vertical integration as the primary risk mitigation strategy
- Liquidity: An ‘evergreen’ structure with regular liquidity windows after a short initial lock-up
An overview of our approach
We aim to deliver attractive risk-adjusted returns with a ‘peace of mind’ approach, avoiding experiments, taking as little headline and execution risk as possible and investing in low-cost production system/regions and investment-grade countries only.
Our highly experienced team of large-scale farm investment practitioners – with a long and robust track record – uses a combination of top-down and bottom-up analysis to identify and combine the most attractive opportunities from across the risk and return spectrum.
The proposed scope
The Insight Farmland strategy aims to build out the existing bridgeheads in: Oceania (Australia and New Zealand); Pacific South America (Chile/Peru/Colombia), EU (Romania/Portugal/Spain), UK, USA.
Insight farmland strategy 2018: the proposed scope
Alignment with ESG guidelines
The strategy is focused on sustainability goals that drive target selection and asset management.
We adhere to specific guidelines demonstrating our commitment to long-term sustainability and key selection criteria for targeting geographies through informed climate change overlays.
Read our responsible invesment in farmland for further information on our commitment to ESG.
1 The targeted rates of return are hypothetical returns, and are for illustrative purposes only. Accordingly, no assumptions or comparisons should be made based upon these returns. Hypothetical returns are subject to inherent limitations. One limitation is that the returns do not take into account the impact that market and economic risks, such as defaults, pre-payments, and reinvestment rates, may have on actual trading. In no circumstances should the targeted returns be regarded as a representation, warranty or prediction that the specific deal will reflect any particular performance or that it will achieve or is likely to achieve any particular result or that investors will be able to avoid losses, including total losses of their investment.
Past performance is not indicative of future results. Investment in any strategy involves a risk of loss which may partly be due to exchange rate fluctuations.
The performance results shown, whether net or gross of investment management fees, reflect the reinvestment of dividends and/or income and other earnings. Any gross of fees performance does not include fees and charges and these can have a material detrimental effect on the performance of an investment.
Any target performance aims are not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for the returns to be significantly different than expected.
Portfolio holdings and allocations are subject to change, for information only and are not investment recommendations. Each account is individually managed, and portfolio allocations could differ from what is presented herein.
Farmland is exposed to the impact of government policy. Subsidies, renewable fuels, trade agreements and attitudes to ownership rights can vary between markets, and may change over time. Farmland is an inherently illiquid asset subject to the range of risks associated with primary production. Land values, like commodities, will experience large deviations from the equilibrium as a result of a range of market forces such as returns across other assets, level of interest rates, and investor sentiment.
Investments in emerging markets can be less liquid and riskier than more developed markets and difficulties in accounting, dealing, settlement and custody may arise.
The investment manager may invest in instruments which can be difficult to sell when markets are stressed.
Insight North America LLC (INA) is a registered investment adviser under the Investment Advisers Act of 1940 and regulated by the US Securities and Exchange Commission. INA is part of “Insight” or “Insight Investment”, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. Insight’s assets under management are represented by the value of cash securities and other economic exposures, and are calculated on a gross notional basis. Advisory services referenced herein are available in the US only through INA.
The views herein represent the opinions of Insight and are subject to change based on subsequent developments. They are not intended as investment advice or to predict or depict the performance of any investment. The material contained herein is not intended to provide, and should not be relied on for, investment, accounting or legal tax advice. Further, this material does not constitute a recommendation to buy, sell or hold any security. No offer or solicitation for the sale of any security or financial instrument is made hereby.