The Washington State Investment Board has added $400 million to its agricultural investment portfolio through re-investments with existing farmland managers UBS Farmland Investors and Homestead Capital.
According to a February WSIB Investment Advisory, the $155 billion pension committed an additional $200 million to an existing separately managed account with UBS and $200 million to Homestead Capital USA Fund IV.
WSIB declined to comment.
The pension originally committed $100 million to Olympic Sun, the UBS-managed separate account, in 2013.
“The fund invests in permanent and vegetable crop farmlands in the US, which will then be leased to farmers,” wrote WSIB staff in the advisory. “Founded in 1983, UBS Farmland Investors have been managing institutional capital since 1990.”
UBS, which also declined to comment, hired Darren Rabenou in April 2021 for a New York-based role focused in part on expanding into the agribusiness. Rabenou is a former executive of Bakersfield, California-headquartered Fabbri Fund Management, which has a focus on permanent crops such as almonds and table and wine grapes.
Rabenou told Agri Investor at the time that a key part of any expansion would likely include an effort to meet strong LP demand for ag-focused co-investments that can support broader sustainability and technological progress efforts.
“We think investors are looking to invest in agriculture, in size,” he said. “They are going to want to work with partners that understand the space and also work with large players. A group like ourselves, we could work with operators, existing or new farm operators, or we can work with other asset managers because of our size.”
In September, UBS announced a collaboration with Dutch pension fund manager PGGM that would devote an “initial investment” of $700 million to the construction of cold storage facilities across the US.
“We believe we are uniquely positioned to execute this cold storage strategy, offering investors access to opportunities early in the replacement cycle of dated facilities and providing tenants with the latest technology in state-of-the-art facilities,” Rabenou said.
WSIB previously committed $100 million to the second iteration of Homestead’s USA Farmland Fund series and $150 million to its successor vehicle. The strategy of the fourth fund that WSIB committed to last month will focus on investments into row and permanent crop farmland in the US Delta, Midwest, Mountain West, Pacific Northwest and Pacific regions.
Homestead is seeking $500 million for the fund, which has attracted commitments from the Rhode Island Investment Authority and the State Universities Retirement System of Illinois.
In addition to farmland investments focused on improvements to undervalued properties, Fund IV will also support Homestead’s entry in agricultural credit through a 15 percent strategy allocation to provision of loans of up to $25 million, mostly to producers within the firm’s established network of regional farm managers, according to a September presentation delivered to Rhode Island staff.
WSIB has committed to at least 16 ag and timber-related investment vehicles, including strategies managed by International Farming Corporation, Agriculture Capital, PGGIM Real Estate and Arable Capital Partners (in which WSIB is the sole investor), among others.