Sustainable Farmland Trust targets £200m LSE float

Managed by US-based asset manager International Farming, SFT could become the first farmland-focused investment trust listed on the London Stock Exchange.

The Sustainable Farmland Trust has signaled its intent to float on the London Stock Exchange in a £200 million ($231 million; €232 million) initial public offering.

The trust will be managed by US-based investment manager International Farming, which has an exclusive focus on US agricultural asset management. International Farming has more than $2.2 billion in group assets under management, according to a statement.

SFT will issue 200 million ordinary shares in the capital of the company at an issue price of £1. A date for the floatation is yet to be set.

The vehicle could become the first farmland-focused investment company listed on the LSE, after Capital Advisory Partners’ plan to float the Global Sustainable Farmland Income Trust on the LSE fell through in early 2020 due to market volatility created by covid-19.

The trust will invest in a diversified portfolio of US farmland and related agricultural assets. It will aim to deliver a target net asset value total return of 7-9 percent per annum net of all fees, expenses and taxes, on the basis of the initial issue price once fully invested. It will target an annual dividend yield of “at least” 4.5 percent, the statement said.

Chair of the SFT Andy Crossley said in a statement: “We believe that the company is perfectly positioned for the current inflationary environment, with outstanding risk adjusted economic returns while also providing a sustainable and appropriately managed food source.

“We believe this unique and highly scalable asset class has enormous potential to provide long-term returns from a combination of both income and capital growth, that historically outperform further in an inflationary environment.”

SFT will invest in portfolio of operational farmland assets held in International Farming’s Core Farmland Fund, a private vehicle managed by the firm, as well as making direct investments in farming and agricultural supply chain and infrastructure assets across the US.

The Core Farmland Fund delivered net IRR of 10.6 percent between October 2019 and June 2022, and has an audited net asset value of $232 million.

International Farming has owned or managed approximately 420,000 farmland and ranchland acres since inception in 2009 across 18 US states, two Australian states and in Chile, working with more than 80 crop types.