UK pension awards indirect agri mandate

The Royal Borough of Windsor and Maidenhead pension fund has hired WP Global Partners, the private equity and private debt asset manager, to handle a global agribusiness investment mandate.

The fund wants to play the agriculture sector through co-investments, venture capital and private equity funds investing into companies involved in the food and water chain. WP has yet to make an investment on the fund’s behalf since being mandated at the end of 2013, according to Nick Greenwood, pension fund manager at the borough.

“Our investments could include buying a stake in companies supplying seed and rootstock, aggregators of small farm operating companies or in weather technology companies; we are very flexible. But it is still very early days and we are waiting for the right opportunity,” said Greenwood.

The mandate does not have a specific target size, he added.

Greenwood and his colleagues started researching agriculture investment three years ago but soon widened the research beyond investing into land because it presented too many risks.

“We prefer to play the agriculture theme through private equity investment into companies involved in the food chain because we do not feel comfortable with the risks involved in investing into land overseas,” Greenwood told Agri Investor. “There are too many factors at play such as political changes and restrictions to foreign ownership. There is reputational risk at stake too.”

“El Nino creating the hottest summer on record in 2015 is a risk factor in farmland. The risks are totally different to banks not providing leverage loans to mid-market companies in the States — people should look at what the actual risks are.”

The fund classifies the mandate within its private equity portfolio although Greenwood argues that an investment’s function — its exposure — should take precedence over its form and so argues that the mandate could sit within the fund’s commodities bucket.