CPPIB exits $520m US farmland portfolio

The $258bn Canadian pension sold the chunk in a single sale during the previous quarter, in a move a source says may not reflect a decision to leave the asset class entirely.

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The $258bn Canadian pension sold the chunk in a single sale during the previous quarter, in a move a source says may not reflect a decision to leave the asset class entirely.

The Canada Pension Plan Investment Board sold $520 million in US farmland assets during the third quarter, putting an end to a divestment process mulled since 2016.

In a quarterly statement, the C$328 billion ($258 billion; €221 billion) pension said the US farmland assets had been held by an entity called Agriculture Company of America and were accumulated between 2013 and 2016.

Two market sources told Agri Investor that the pension’s assets had been offered for sale only as a single block, adding that Microsoft founder Bill Gates is thought to be the buyer of CPPIB’s US farmland.

CPPIB representatives did not answer questions seeking further detail by the time of publication. A representative of Cascade Investment, Gates’ wealth manager, also did not answer questions seeking further detail by the time of publication.

The pension began investing in farmland in 2013 and in April 2016 purchased a 40 percent stake in the agricultural business of Glencore, for $2.5 billion. A year later, CPPIB was reported to be considering selling its existing farmland portfolio and to have decided to cease further investments in the asset class.

At the time, a CPPIB representative declined to confirm or deny the report to Agri Investor.

“CPPIB annually updates progress on strategy, including the repositioning of any program,” a spokesman said then.

A third source suggested to Agri Investor on Friday that rather than necessarily reflecting a decision to leave the farmland asset class entirely, CPPIB’s decision to sell its farmland portfolio might be because it was not able to amass the scale in the US market required to justify maintaining an internal team devoted to farmland.

The source added that if the pension’s behavior in other asset classes could serve as a guide, the sale announced on Friday would not necessarily preclude future commitments to farmland funds.

Toronto-headquartered CPPIB’s agricultural investments are held within a real assets department that also includes its infrastructure, natural resource and real estate investments. As of September 30, CPPIB’s natural resource investments, which include both agriculture and energy investments, were valued at $7.9 billion and constituted 2.4 percent of the overall portfolio.