UBS AgriVest raises $82.5m amid deal slowdown

UBS AgriVest's 2006 vintage open-ended vehicle has raised $82.5m of new money over the last year, reflecting modest investment levels, with volatile land prices and increased competition stifling deal activity.

UBS AgriVest Farmland Fund, UBS AgriVest’s 2006 vintage open-ended vehicle, has raised $82.5 million of new money over the last year, reflecting modest investment levels, with volatile land prices and increased competition stifling deal activity, according to the firm.

The fund only replaces capital invested, and James McCandless, managing director of the firm, told Agri Investor last year that it had been “very difficult to find anything priced where it should be.” This hasn’t changed in the last year, he said, with acquisition levels reflecting these challenges. He also said the competitive landscape has developed to include more broker dealers offering institutional grade farmland investment opportunities.

The US Department of Agriculture said last month that despite a slowdown, US farmland values had continued their decade-long rise.

The firm invests in 25 states and so far this year has acquired approximately 17,000 acres in deals worth $92 million in states including Washington, California, Idaho, Louisiana, Florida and Colorado. Following the latest capital injection, the fund has $595 million under management from 48 investors.

Drought conditions in several US states have also been weighing on investment levels, but McCandless said in a recent interview with Agri Investor that while some of AgriVest’s properties have had small cutbacks in water there have been no significant problems irrigating farmland. “We are very comfortable with the water situation,” he said.

The firm had planned to hire an analyst this year, and is still on the hunt for the right candidate, McCandless said.

In addition to making primary investments, UBS AgriVest also manages the Alaska Retirement Management Board’s farmland portfolio, as well as being co-invested alongside Washington State Investment Board into Olympic Sun, a separate account for permanent and vegetable crop investment in the US.

In June last year UBS Global Asset Management launched an own-and-operate farmland investment platform in Australia and New Zealand, in contrast to its wholly buy-and-lease approach in the US.