According to a mid-February presentation from the $3.58 billion pension’s natural resources and infrastructure consultant Hamilton Lane, the legal process for the investment began last year and SBCERS’ commitment to the HTFF will count toward its 2020 allocation.
The fund will support investments of at least $5 million into farmland, timber and related infrastructure, according to the report.
“[HTFF] seeks to invest up to 20 percent of the fund in related infrastructure investments in order to increase revenue, augment diversification and enhance access to investment opportunities,” Hamilton Lane wrote.
Within ag, HTFF’s strategy is described as including a focus on both permanent and row crops, with an expectation the firm will allocate a larger portion of the fund to permanent crops. Hamilton Lane wrote that while the US is the HTTF’s primary market, the strategy also includes scope for investments in Australia, Brazil, Chile, Finland, Sweden, New Zealand and Uruguay.
The vehicle closed its first sale in January 2018 and by February 2018 held $706 million from 37 investors including the $1.23 billion Cambridge Retirement System, the $311.9 million Cape Coral General Employees’ Pension Fund and the $363 million New Bedford Retirement System.
Hancock managing director Tim Cayen told the Police Retirement System of St Louis’ Board of Trustees in June 2018, that the firm had kept the HTFF closed to new investors since its initial close and expected to re-open to new investors in 2019.
A late August 2020 regulatory filing showed the HTFF had raised $263 million from 20 investors in a distinct offering launched earlier that month.
The focus on related infrastructure was explored in a December research note in which Hancock described its “Farmland Plus” investment strategy.
It detailed how a focus on processing and marketing assets has been applied through Hancock’s integration of a trading desk into a Washington apple investment and the addition of a freezing facility to a cranberry project in Canada. Hancock wrote that an investment focus on agricultural infrastructure such as sorting, manufacturing and storage facilities is well-suited to rapidly growing markets such as specialty, niche or organic crops.
“New processing plant technologies and economies of scale can produce efficiency gains that may benefit the overall supply chain,” Hancock analysts wrote. “A Farmland Plus investment strategy, with the appropriate structure, can help streamline costs and time from farm to market, align supply chain interests and facilitate the implementation of long-term initiatives in quality, sustainability and traceability.”
In January, Hancock entered Chilean agriculture with its purchase of a majority stake in David Del Curto, a fruit production, packaging and export company headquartered in Santiago. The deal included a nursery and three packing facilities used to export apples, citrus, grapes and other crops to Europe, North America, the Middle East and Asia.
In January, SBCERS committed $15 million to Tiverton AgriFinance II, a debt-focused vehicle managed by Raleigh, North Carolina-headquartered Tiverton Advisors. Its existing ag-related investments include commitments to Renewable Resource Group’s RRG Sustainable Water Impact Fund and International Farming Corporation’s US Farming Realty Trust II, among others.