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UBS farmland fund nets $43m over one year

The open-ended farmland investing vehicle has raised $649.7m since launching in 2006.

UBS Farmland Investors’ AgriVest Farmland Fund has raised $43 million from three investors over the past year, according to a Wednesday regulatory filing.

The filing revealed that the open-ended vehicle has raised a total of $649.7 million from 58 investors since its first sale in June 2006; this compares with the $606.7 million raised from 55 investors cited in a filing from June 2016.

In September 2015, a filing showed the vehicle had raised $82.5 million over the previous year.

The AgriVest Farmland Fund was previously named the UBS AgriVest Farmland Fund before a regulatory change required that the name of the sponsoring bank be removed from the title in early 2016.

According to a October presentation to the Sacramento Sierra Chapter of the Appraisal Institute, UBS Farmland Investors manages a portfolio of 206,205 acres of farmland growing more than 30 crops spread across 15 US states.

By crop type, 14 percent of the portfolio is devoted to permanent crops, 17 percent to vegetables and 69 percent to row crops, according to the presentation.

In an April 2016 presentation to the Sonoma County Employees’ Retirement Association, UBS Farmland Investors director Erik Roget and managing director James McCandless discussed their desire to increase the portion of permanent plantings in the portfolio from the then-current level of 13 percent to a target of 20 percent. Roget related that he had recently investigated permanent crop opportunities in California, including a walnut orchard, but found that the properties’ risk profiles and prices excluded them from the AgriVest Farmland Fund.

At the meeting, McCandless highlighted the fund’s performance relative to a custom Core Farmland Index, which UBS calculates by excluding owner operated investments and re-weighting NCRIEF farmland returns to 80 percent annual (including vegetable) cropland and 20 percent permanent cropland, which the firm considers to be a more accurate benchmark for broadly-diversified US farmland exposure.

In the year ending in December 2015, McCandless said, the AgriVest Farmland Fund had produced 6.9 percent returns and outperformed the 6.2 percent return from the index. The AgriVest Farmland Fund’s 11.9 percent return over the previous five years underperformed the index’s 12.3 percent returns over that period, which McCandless attributed in part to the under-weighting of permanent crop plantings within the portfolio.

According to a recent SCERA investment summary, the AgriVest Farmland Fund had returned 2.44 percent in 2017 as of March 31, surpassing its Core Farmland benchmark by 118 basis points.