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Kempen open-end SDG farmland fund hits €350m mark

The European firm has taken €150m from two Dutch insurance companies for the UN Sustainable Development Goals-aligned vehicle.

Kempen Capital Management’s SDG Farmland Fund has taken a further €150 million in commitments from Dutch insurance companies Coöperatie DELA and De Goudse.

The open-end vehicle has received a total of €350 million since launching in April, having received a €200 million seed commitment from Dutch pension Stichting Pensioenfonds PostNL.

Kempen SDG Farmland Fund targets net returns of between 6 percent and 8 percent over a 10-year horizon. These are comprised of between 3 percent and 6 percent annual returns from crops and 1 percent to 2 percent from annual productivity improvements in the long term.

Fund portfolio managers Richard Jacobs and Edzard Potgieser said in a joint statement: “Besides the returns and the ecological aspects of this fund, we feel that the social factor is very important as well. By investing in this fund, we enable young farmers to use new capital to achieve their long-term sustainability goals.”

The vehicle focuses on farmland transactions worth between €5 million and €20 million and will construct a portfolio split evenly between row and permanent crops. The fund has a five-year lock-up, and Kempen intends to raise up to €1 billion over the next two to three years.

The fund was created after a group of pensions, including Stitching Pensioenfonds PostNL, asked Kempen if it could form a vehicle that would help promote a shift toward sustainable food production and support soil health, biodiversity and water quality.

The fund will seek to hit UN Sustainable Development Goals including: the elimination of hunger (SDG 2), improvements in clean water and sanitation (SDG 6) and sustainable management of natural resources (SDG 15).

Permanent crop investments will be spread across avocados, olives and almonds in Australia, Portugal, New Zealand and the US. Row crop investments will include grains, beans and vegetables in Denmark, the US and Australia.