TIAA raising European farmland-focused fund

Westchester Group Investment Management, the agricultural asset management firm owned by Nuveen (formerly TIAA), is raising a fund to invest in European farmland, with Poland understood to be the vehicle’s initial focus.

A Nuveen representative declined to comment.

The TIAA European Farmland Fund (TEFF) was established earlier this year, according to Westchester’s quarterly Global Thoughts newsletter.  The vehicle’s first deal was the acquisition of 31,900 acres of farmland across 23 farms in the northern and western regions of Poland.

The properties are currently growing oilseed rape and wheat, but some land could be shifted into higher-value crops including sugar beet, root vegetables, green brassicas and salads, according to the firm.

The firm said that Poland was selected as the initial focus for the fund due to the large size of its agricultural sector, its growing economy and the legal framework provided by the nation’s membership in the European Union. It said investments may in the future extend into higher-risk markets such as Czech Republic and Romania.

“While similar to Western Europe, there is still a significant yield gap to be closed,” Marcin Wielgosz, Westchester country manager for Poland, wrote in the newsletter.  “This is reflected in significantly lower farmland prices, which will be growing over time in line with improving farm efficiency and maturity of the market, enhancing our direct and indirect yields from the investment.”

Wielgosz is managing the fund’s investments in Poland and working under Martin Davies, who joined the firm in September 2014 to establish a platform for agricultural investments in Europe.

In a December 2016 interview, Davies said that investments from the European platform will follow the buy-and-lease model that Westchester employs in the majority of its other row crop investments.

A source familiar with the fund told Agri Investor that TEFF has also purchased assets from Rabobank’s Rabo Farm Fund.

Gerd Boeckenhoff, formerly chief investment officer of Rabo Farm, joined Westchester Group of Europe as general manager in April 2016, according to his LinkedIn profile.