Deals

WSIB invests $400m in agri

The US public pension giant has committed $250m to a separate account managed by Wood Creek as well as $50m to ACM’s ‘permanent crops’ fund, which aims to raise $250m.

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The Washington State Investment Board (WSIB)’s latest commitments now bring to three its total investments in agriculture.

The investments form part of its ‘Tangible Assets’ programme; launched in 2008 to invest in agriculture, commodities, infrastructure, natural resource rights (such as mining) and timber, the portfolio is currently valued at $1.08 billion. It focuses on income generation and combined with asset appreciation, should generate returns that fall between fixed income and equities, according to a spokesperson at WSIB. In general it is expected to match inflation, she said.

The board approved a $250 million separate account investment with Wood Creek Capital Management, a real assets manager based in Conneticut, to invest into between seven and 10 agriculture-related midstream assets.

Wood Creek will own 1.5 percent equity in Steelhead Midstream, the limited liability company holding the assets, and WSIB will own the remainder. Wood Creek focuses on private core capital assets and privately-owned infrastructure, according to its website. It declined to comment further on strategy.

WSIB also approved a $50 million investment into the ACM Permanent Crops fund, which aims to raise $250 million for investment in fruit- and nut-producing tree.

The fund is managed by Agriculture Capital Management, an asset manager offering vertically integrated sustainable farming investments. WSIB’s stake will represent 20 percent of the fund if the fund reaches its $250 million target size. ACM will commit one percent.

ACM’s first fund will buy trees that bear fruit or nuts and also invest into the systems that manage them and handle the produce all the way to the supermarket shelf. This includes midstream operations such as fruit picking, storing, packaging and labelling. The fund was launched in association with Equilibrium Capital, a real assets fund manufacturer and distributor. Equilibrium helps third parties to launch new funds and distribute them.

Some $100 million was invested into Olympic Sun, a separate account strategy, to invest in permanent and vegetable crops in the United States. WSIB owns 98 percent of the equity. UBS will own the other 2 percent; the manager is UBS AgriVest. This mandate was the first upstream agriculture strategy for WSIB.