* Focus on farmland in U.S., Australia, Brazil
* Forms $2 bln fund with Canadian, European investor groups
* TIAA-CREF cites growing demand for agricultural products
* TIAA-CREF affiliate will manage new company
By Carey Gillam
May 14 Financial services group TIAA-CREF, which
is a major agricultural investor, said on Monday it is
partnering with Canadian and European money managers to form a
$2 billion global farmland investing company to capitalize on
the growing demand for grains and other agricultural products.
U.S.-based TIAA-CREF, which also provides retirement
services and has about $487 billion in assets under management,
said it and several international institutional investors had $2
billion in commitments to invest in farmland in the United
States, Australia and Brazil, all key grain exporters.
A TIAA-CREF affiliate will manage the TIAA-CREF Global
Investors include AP2, one of the largest pension funds in
northern Europe with about $32.1 billion under management;
British Columbia Investment Management Corporation (bcIMC), an
independent investment management company that manages about
$91.6 billion; and the Caisse de dépôt et placement du Québec,
which manages funds for public and private pension and insurance
plans and has about $161 billion in net assets.
Growing demand for protein in developing economies and
alternative energy mandates are helping to raise demand for
agricultural products used for food, fiber and fuel and driving
investment in farmland, said Jose Minaya, managing director and
head of global natural resources and infrastructure investments
"Direct investment in farmland provides access to the key
driver of food production," he said.
Farmland prices in several key U.S. farm states are
currently at or near record highs amid an agricultural boom.
TIAA-CREF currently manages about $2.5 billion in more than
400 properties totaling 600,000 acres of farmland in the United
States, Australia, South America and Eastern Europe.
"We believe farmland offers investors excellent portfolio
diversification given its low correlation to traditional asset
classes like stocks and bonds," Minaya said.
For Quebec's Caisse, the deal marks its entry into farmland
"Farmland presents a risk-return profile that meets our
depositors' objectives and that offers portfolio
diversification," said Normand Provost, Caisse executive vice
president, private equity.