TIAA is among the largest institutional investors in agriculture, with investments in more than 400 farms in North America, South America, Australia, and Eastern Europe as part of its General Account.
TIAA-CREF owns agricultural land in the US, Australia, Brazil and central and Eastern Europe, most of which is leased out.
Pension funds are deepening their commitment to farmland, upping investments by billions of dollars and moving to active strategies, as a hedge against potential inflation and to diversifty from riskier investments.
"In the age of derivatives and evaporating valuations, farmland is gold with a cash flow."
As world population expands, the demand for arable land should soar. At least that's what George Soros, Lord Rothschild, and other investors believe.
The debate over foreign investment is set to expand from the mining industry to agriculture as overseas investors pour billions of dollars into Australian rural properties considered by some to be strategic national assets.
As with timberland, while direct ownership and management (i.e., being a farmer), is a possibility, such a route is similarly fraught with difficulties. One of the most significant of these is the issue of diversification in the farmland itself - especially with a single investment. A well-diversified holding of farmland (row crop, permanent crop, pasture and even timber) will, therefore, not only require a significant investment, but may also involve land holdings in a number of different locations.
