The amount of capital raised for timber funds dropped $600 million to $1.5 billion in 2015, while agri fundraising was stable on $3.9 billion.
TIAA-CREF’s $3 billion Global Agriculture Fund II attracting the lion’s share of agriculture investment by volume last year, according to the Preqin Global Natural Resources report.
Only three timberland funds held final closes last year compared with six in 2014, so 2016 could be a significant year for forestry fundraising.
The largest final closes in 2015 were on the $860 million BTG Pactual Brazil Timberland Fund and the $484 million Stafford International Timberland Fund VII. In 2014 they were the $663 million Molpus Woodlands Fund IV and New Forests’ A$707 million ($537.77 million; €478.50 million) Australia New Zealand Forest Fund II.
The reports says 14 timberland funds are aiming to raise $3.3 billion this year, and that while most are weighted towards North America, assets in Australasia and Latin America are becoming increasingly attractive. Two-thirds of funds raised since 2006 invested in North America, while Australasia has attracted 15 percent of investment and Latin America 13 percent. Europe and Asia lag behind at 2 percent and 1 percent respectively.
By contrast, 35 percent of capital raised by agriculture and farmland funds since 2006 has been focused on investments in North America, and 26 percent went into internationally diverse fund. Another 9 percent has focused on Asia, 8 percent on Europe, 7 percent on Australasia and 7 percent on Latin America.
The $250 million ACM Permanent Crops Fund, managed by Equilibrium Capital, was the second largest agri fund to be raised last year, according to the report.
Some large LPs, such as the New Mexico Education Retirement Board are considering making their first agricultural investments outside the US territory in Latin America.
TIAA-CREF senior director and portfolio manager Biff Ourso has been one of several US LPs and GPs to tell Agri Investor recently that they are increasingly turning their interest to Latin America, while Aquila Capital is looking to make satellite forestry investments in Latin America through its Aquila Sachwert Basisfonds I.