The UK’s first listed trust to invest in farmland assets will deploy capital immediately after its IPO on 25 February, investment managers at Capital Advisory Partners said.
The Global Sustainable Farmland Income Trust has a hard-cap of $300 million and was announced in December through the publication of its prospectus. It will float on the London Stock Exchange.
Capital Advisory Partners investment manager Ian Monks told Agri Investor the fund has targeted 18 farmland assets with a combined value of roughly $330 million.
“We are aiming to deploy 50 percent within nine months and want to be fully deployed within 18 months,” Monks said.
He added that the trust will pursue a buy and lease strategy, targeting farmland on which fresh fruit, vegetables and nuts are grown, and will seek to avoid “row crop farming unless it has a particular point of difference.”
Capital Advisory Partners investment manager Sven Miserey said a trust is the firm’s preferred vehicle “because it allows us to purchase farmland, as opposed to companies that invest in land, as well as having the ability to commit money for long periods.”
“The main advantage of this is the ability to draw the right operators to come on board with us and feel there is an alignment between the landlord, in other words the investment trust, and the operators, because we’re looking at having a long-term partnership instead of a set and defined timeframe,” Miserey said.
Monks added that a trust vehicle will also open up the asset class to smaller institutional investors, some of which may not have the resources to assign dedicated personnel to studying agricultural assets.
“That’s very much been a barrier for institutions of a medium size,” he said. “It has been the preserve of big institutions or some family offices who have invested directly. We think this is an opportunity to widen the net to a much bigger range of investors, both private and institutional.”
The fund expects to receive commitments of between $1,000 and tens of millions of dollars and will make investments ranging between $10 million and $50 million.
Capital Advisory Partners is targeting a dividend yield of 2.5 percent, growing to 4.25 percent when fully invested. Over the medium to long term, the fund’s total return targets are 7-8 percent, which will be achieved through operational lease income and land appreciation.
It will invest in assets in the US, Europe, New Zealand, Australia and certain countries within Latin and South America.