DGC Asset Management, a UK-based agriculture investment company, is launching its first farmland investment vehicle, offering investments into US-based blueberry farms, next month. Vaccinium, the special purpose vehicle that will hold the assets, is targeting $4 million by the middle of next year, according to David Garner, director at DGC.
Garner is targeting high net worth individuals and venture capital investors some of which might be existing investors in DGC’s real estate investment vehicle, Secure Income Strategy, and through its work as a placement agent for third party funds.
DGC will raise capital on a project-by-project basis and is currently offering investors a stake in its two Oregon-based blueberry farms as the vehicle’s first investments. It is also looking at acquisitions in Chile, another blueberry and fruit producing market. “Blueberries are gaining traction all over the world in places like China and South East Asia. For the most part, we see a positive growth in demand for the fruit. In Oregon we’d get into hazelnuts, blueberries, cherries, as it’s a fruit growing region,” he told Agri Investor.
DGC sources its own investment opportunities but also uses external consultants.
DGC launched in 2009 and has been researching and working in the farmland investment sector since then. The team at DGC were keen to take advantage of farmland’s lacking correlation to traditional assets. And this will contribute to a number of new farmland investments appearing in the market, although this is not necessarily a good thing, according to Garner. “ There’s potential in the future to see lots of money managers throwing together farmland investment vehicles, without proper in depth knowledge of the asset class,” he said. “Also, we will perhaps see more publicly listed farmland investment firms, which to me, takes away from the advantage of farmland being uncorrelated. It opens up the assets to volatile pricing, which isn’t reflective of the value of the assets themselves,” he said.