London-headquartered advisory and investment firm Willis Towers Watson will consider investments in farmland and agricultural funds from its real assets-focused fund of funds, but has yet to find any that meet its investment criteria, according to the firm’s recently-appointed head of real assets.
Paul Jayasingha told Agri Investor that the Secure Income Fund, which launched last month, will function as an open-ended fund of funds, aiming to raise between ₤2 billion ($2.59 billion; €2.38 billion) and ₤3 billion from defined pension schemes in the UK. That capital will be invested in sterling-denominated funds offering annual income streams that are 2-3 percent above those offered by UK government bonds over a period of at least 15 years, he said.
Jayasingha, who succeeded Karen Dolenec as head of real assets as Willis Towers Watson earlier this month, said the fund would be focused primarily on real estate, infrastructure and illiquid credit funds, but would consider making long-term investments in farmland and agricultural funds.
“We certainly do hope that farmland and other investments like that will play a bigger role in the fund [in the future],” Jayasingha said. “If managers out there have a product that gives sterling-denominated contractual income streams that meet our return requirements and we can get our heads around it and understand the risks, and think the risks are well-compensated, pick up the phone and give us a call. We want to hear about it.”
The Irish-domiciled Secure Income Fund was created in response to demand from UK pensions’ looking to de-risk and their increasing willingness to take on illiquidity in return for longer-term, inflation-linked income streams, Jayasingha explained.
While agricultural investments could have some of those characteristics, he said, they compete for space in the fund with newly-emerging real asset strategies including funds focused on solar panels, hydro facilities, car parks on long leases and others.
Willis Towers Watson works with institutional investors on risk assessment, fiduciary management and investment manager selection. The firm has $2.3 trillion in assets under advisory and more than $87 million in assets under management.