LACERA takes $46m secondary stake in TIAA farmland fund

The Los Angeles County Employees’ Retirement Association added to its secondaries investments in farmland managed by Nuveen with the purchase of an additional $46.4 million stake in TIAA-CREFF Global Agriculture II from an unidentified seller.

According to materials distributed at a May 10 meeting of LACERA’s Board of Investments, the secondary purchase was approved in a unanimous vote. Global Agriculture II was described as a real assets fund with row and permanent crop properties.

Affiliate publication New Private Markets reported the meeting also included approval of $275 million in support of transition-focused vehicles managed by Appian Capital Advisory and Ara Capital Partners.

LACERA declined to comment.

The pension’s latest acquisition of TIAA stakes follows an initial set of secondaries deals by LACERA that included $450 million for stakes in both Global Agriculture II and its predecessor in February 2022. The pension also completed an $85 million deal for a portion of Fund I this February.

Following the February 2023 transaction, LACERA real assets investment officer Pushpam Jain told Agri Investor signs of inflation visible through the pension’s commodities investments inspired the move to add farmland. He said his team’s examination of the relatively limited secondaries market in ag revealed some trade in agribusiness fund stakes and advisers who said they had not seen a farmland fund in the secondaries market in as long as a decade.

“The major attractive feature is that everything is bought and developed,” he said. “We can give $100 million to Fund A, B or C. We don’t really know what they will do with it, in the end. We don’t know what exact farms they will buy.”

Pushpam explained that although LACERA had considered an entry into farmland since at least 2018, the opportunity was only created by an unnamed counterparty’s decision to sell their stake. The February 2023 deal then being discussed was above the $50 million hurdle that requires approval from LACERA’s full board before being carried out by staff.

“Secondaries don’t happen in this space as much, so we had to take advantage of the timing and the fact it was available to us,” he added.

Affiliate publication Secondaries Investor reported last month that LACERA has emerged as one of the most aggressive LPs in building out its secondaries and co-investment programs. The title said the pension’s co-investments and secondaries constitute 21 percent of its private equity portfolio and include investments with European mid-market specialists Rivean Capital and Adelis Equity Partners, among others.

The Nuveen Natural Capital unit that now manages the land contained within the vehicles for which LACERA acquired stakes managed a $10.5 billion portfolio of three million farmland and timberland acres across 10 countries.