Pensions & Investments | 19 October 2015

Farmland assets grow 33%; timber assets also climb

By Arleen Jacobius

Justin 'Biff' Ourso said TIAA-CREF raised $3 billion for its farmland fund, which has a 20-year life.

Farmland and timber asset classes each had healthy growth during the survey period. Farmland manager assets were up 33% to $1.24 billion, albeit from a small base. Timber assets were up 11% to $19.4 billion.

TIAA-CREF's farmland assets grew by 56% to $7.8 billion in committed assets, which includes farmland and agribusiness.

Part of the increase was due to new capital, a $3 billion farmland fund which held its final close in July after raising most of its capital by June 30, said Justin “Biff” Ourso, senior director and portfolio manager with TIAA-CREF and a member of the natural resources and infrastructure investments team who is based in Charlotte, N.C.

The fund is a very long-term oriented vehicle with a 20-year life that is “more of a collaborative approach with likeminded investors,” Mr. Ourso said.

Timber managers continued a global push, seeking to invest outside the U.S. which traditionally had been the site of much of timber investment. “Agriculture is an asset class that is early in its infancy,” he said.

During the survey period TIAA-CREF raised a $667 million timber fund this year with a number of institutional investors that is focusing a global strategy, Mr. Ourso noted.

“Agriculture and timber have interesting thematics, including increasing population, increasing middle class and evolving dietary patterns” that is attracting investor interest, he said.

TIAA-CREF's timber assets grew 13% to $2.3 billion during the survey period, placing it in the fourth spot on Pensions & Investments' list of timber managers.

Global Forest Partners LP, Lebanon, N.H., had $1.6 billion in timber assets for U.S. institutional, tax-exempt investors, an increase of 8%.

“Our investments are almost exclusively outside the U.S., said Peter C. Mertz, chairman and chief executive officer of Global Forest Partners LP, Lebanon, N.H., in an e-mail. The firm ranked sixth on the list of top timber managers.