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.

Farmland portfolio

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 a constantly 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.

Portfolio holdings are subject to change, for information only and are not investment recommendations.

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.