Research & Data

One in four SWFs hold agri assets – report

In natural resources, only energy is more popular among sovereign wealth funds than farmland and agri investment.

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More than a quarter of the world’s sovereign wealth funds are invested in agriculture or farmland, according to data released to Agri Investor.

Forty-nine percent of sovereign wealth funds, which hold $6.51 trillion in assets under management, invest in natural resources, according to a report from data company Preqin.

Over half, or 56 percent of funds invested in natural resources target investments in agriculture, it has been revealed. Thirty-nine percent target timberland or water.

Natural resources as a sub-sector often includes minerals, agriculture and forestry. Only energy investments, which are held by all sovereign wealth funds with exposure to alternatives, had broader sovereign wealth fund-exposure overall than natural resources.

Sovereign wealth funds from Angola to the UK and Saudi Arabia have increased investment in farmland and forestry in the last year as oil markets continue to suffer low prices and food security becomes an increasingly pressing issue for governments.

China’s sovereign wealth fund, China Investment Corporation, also made an active decision to divert more funds to agriculture and its supply chains in 2014, stating that the asset class helped it hedge against inflation and diversify its risk profile.

States in Europe, central Asia and the Middle East have also upped their interest in agriculture. The relatively new Ireland Strategic Investment Fund (ISIF), which functions similarly to a sovereign wealth fund, is targeting agriculture “because it fits our mandate of creating an economic impact and commercial returns. […] Ireland has a natural advantage in several agri sub-sectors,” head of food and agriculture investments Cathal Fitzgerald told Agri Investor last year. In January, Saudi Arabia’s state agricultural investment body, Saudi Agricultural and Livestock Investment Company (Salic), paid $188 million (€172 million; £130 million) for a 20 percent stake in Brazilian beef producer Minerva, one investment in a long line of moves by the kingdom to shore up its food security.