UBS AgriVest considers analyst hire as AUM increases – exclusive

The US investment manager increased AUM by $100m in 2014 to $1.1bn and 116 properties, although new investor demand was muted.

Buy-and-lease agri investment manager UBS AgriVest is considering hiring an analyst during 2015 to bolster its asset management team as the firm’s farmland portfolio grows, according to James McCandless, managing director.

The firm now has 116 properties under management after five new farmland acquisitions in 2014 grew assets under management by $100 million to $1.1 billion on 2013 levels.

James McCandless
James McCandless

But the capital was raised from existing mandates and undrawn fund capital as new investor commitments were limited; the firm took on just one new institutional investor during the year, according to McCandless.

“It has slowed down a bit as folks are looking into other things outside of farmland,” he told Agri Investor.

McCandless acknowledged that the competitive landscape had developed to include more broker dealers offering institutional grade farmland investment opportunities, although a lacking institutional track record could be off-putting to institutions, he argued.

Falling commodity prices have yet to impact UBS AgriVest’s rental returns, because “it takes a while to filter down”, said McCandless, and a general levelling in farmland prices has also had limited impact so far, he said.

“We own very little property in the Mid-West where much of the decline has happened. but we do have one property in Indiana where values have fallen,” he said. UBS hires independent land valuation companies to appraise its portfolio every quarter when it adjusts its fund value and overall assets under management accordingly.

The firm did not sell any properties during the year and McCandless said that acquisition levels were low because it was “very difficult to find anything priced where it should be”. He is relatively hopeful that the recent steadying in farmland prices might produce better buying opportunities despite a slow start to the year.