APERS commits $50m to IFC and PGIM farmland funds

The Arkansas Public Employees Retirement System committed $50 million each to two separate farmland vehicles managed by Prudential Agricultural Investments and International Farming Corporation at a November meeting.

In August, APERS chief investment officer Carlos Borromeo told Agri Investor the final decision on a single $85 million farmland allocation would come after November presentations by both firms.

He said the $11.5 billion retirement fund worked with consultants Callan to identify PGIM and IFC from a list of seven. According to minutes from a February APERS meeting, the addition of a 5 percent farmland target was part of a broader effort to increase APERS’ real asset portfolio from 12 to 16 percent of total assets.

The Arkansas Democrat Gazette reported in mid-November APERS trustees voted to approve seperate investments of $50 million each with both IFC and PGIM Agriculture Investments.

Borromeo did not provide further detail by press time.

“The criteria was simple,” he said in August. “An institutional farmland/agriculture manager, an open-ended fund was preferred with zero additional timber exposure and invested solely in the United States.”

PGIM Agriculture manages an open-ended vehicle called the PGIM US Agriculture Fund that received a $100 million commitment from the Washington State Investment Board in April. Materials related to that commitment described PGIM’s efforts to add new properties to a open-ended vehicle managing $400 million in existing farmland properties that was targeting $600 million.

Kingston, North Carolina-headquartered IFC’s Core Farmland Fund is an open-ended vehicle to which WSIB committed $250 million in 2018. WSIB materials showed that vehicle targets annual returns of between 7 and 9 percent through farmland investments across row, permanent and specialty crop types.

In late December, Seattle-headquartered Cascadia Capital announced it acted as financial adviser to Washington-headquartered Chelan Fruit in its acquisition by IFC.

Chelan Fruit is a grower, packer and shipper of apples, cherries and pears founded in 1921. It manages storage and packing facilities along with 1,100 acres of orchards and offers apples under the SugarBee band.

In a statement, IFC chief executive Charlie McNairy said the investment into Chelan reflected his firm’s interest in supporting its regional suppliers.

“We are committed to helping them and re-establishing Washington State’s North District as a leader in providing premium fruit,” he added.