Portfolio allocation

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We believe the most effective approach to investing in farmland is to aim for a portfolio diversified by geographies and products, focusing on identifying opportunities that capture the potential benefits of scale and exhibit demonstrable competitive advantages.

Portfolio allocation

Source: Insight Investment. For illustrative purposes only.

Insight farmland competitive advantage

Over many years Insight Farmland has built corporate farming expertise with tried and tested people, processes and structures. As part of Insight Investment, Insight Farmland provides investors with access to the group’s robust infrastructure and systems.

A team of seasoned veterans offers long-term investment solutions to clients seeking inflation protection, diversification away from the mainstream, a broad mix of assets with adequate risk-adjusted return expectations and the possibility of adding value through an appropriate ESG framework.

 

The investment process

We believe the most effective approach to investing in farmland is to aim for a portfolio diversified by geographies and products, focusing on identifying opportunities that capture the potential benefits of scale and exhibit demonstrable competitive advantages.

We follow a structured and robust asset allocation and selection strategy.

All transactions undergo a detailed due diligence process which includes a combination of desktop research and on-site visits and inspections.

These transactions are then subject to an internal investment committee evaluation and an independent fund board review.

Farmland investment process

The approach to developing the pipeline

The current pipeline contains opportunities sourced on a proprietary basis and in most cases, preliminary assessment of the investment case has been completed.

A preliminary ESG overlay is applied in the assessment of the project to identify overall fit with the strategy. In most opportunities, the approach is to acquire complete ownership but in certain instances, there would be flexibility to allow existing vendors (manager vendor category) to retain a certain level of minority stake to align investment outcomes. Only in exceptional instances would minority investment be considered.

A competitive advantage for Insight is the fact that there is an updated pipeline of investment opportunities encompassing assets worth at least US$2bn at any point in time, with deal flow generated through the global agribusiness network that Insight and the farmland team members have developed over the last 40 years.

Farmland pipeline

 

Source: Insight. Data as of February 28, 2018. Prospective project figure is based on indicative assessment of value by vendors and/or their agents.

IMPORTANT INFORMATION 

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.

Targeted returns intend to demonstrate that the strategy is managed in such a manner as to seek to achieve the target return over a normal market cycle based on what Insight has observed in the market, generally, over the course of an investment cycle. 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.

Portfolio holdings and allocations are subject to change, for information only and are not investment recommendations. Each investor’s portfolio is individually managed and may vary from the information shown.

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.