The Arizona Public Safety Personnel Retirement System has committed $100 million to Hancock Agricultural Investment Group to invest in farmland.
The commitment is the pension’s only current investment in the agriculture sector, deputy chief investment officer Martin Anderson confirmed, adding that PSPRS’s allocation to real assets is roughly in line with its 8.55 percent target. The LP does not set targets for sub-allocations within the real assets class, he said.
He declined to comment on the investment or whether the pension plans to increase its exposure to the sector.
Hancock acquires and leases farmland on behalf of institutional investors through customised agriculture funds that vary in geographic and crop-type focus. Funds managed by the firm include a $221.8 million fund for Alaska Retirement Management Board focused on North American row crops and a $162.3 million fund with a mix of row crop and permanent crop assets in the US and Australia set up for Dallas Police and Fire Pension System. The firm has $2.6 billion of assets under management with 300,000 acres of assets in the US, Australia and Canada.
ARMB investment officer Stephen Sikes recently told Agri Investor he sees downward pressure on US farmland values as a chance to make opportunistic acquisitions, despite a short-term decrease in returns.
“Lower income potential for farmers creates headwinds for rents which is the ultimate driver of returns,” he said. “We are long-term investors so are hopeful it creates investment opportunity.”
PSPRS currently holds $8.17 billion assets under management according to PEI Research & Analytics.