Farm land investments are starting to gain momentum as different businesses decide to invest due to agriculture- industry slump which made the land prices go down.
Teachers Insurance and Annuity Association - College Retirement Equities Fund or TIAA- CREF happily said last Tuesday that they had raised a $3 billion funds for their second farmland- investment business which is five hundred million more than what they expected. TIAA- CREF will use the fund in investing to North, South America and Australia. They also have commitments with the inventors such as Mexico State Investment Council and United Kingdom's Greater Manchester Pension Fund.
Investors have high hopes that farm lands can aid in hunger and can help bringing wealth to Africa, Asia and any other place. However, they are also predicting that harvest of crops will not be as plenty as the previous harvest due to urbanization and lack of farm that will cater a lot of crops. Farmland usually earn from its farmers' income which they also called as "gold with a coupon."
TIAA- CREF has a pretty solid track record with their start in farmland- investing since 2007 and now manages more than $5 billion in farmland assets world-wide. The partnership made in the first quarter of the year has already raised $2 billion.
Homestead Capital USA LLC, a private-investment partnership led by former executives at Goldman Sachs Group Inc. and J.P. Morgan Chase & Co., joined the trend of farmland investment fund after raising $173 million. Two of the investors are University of Alabama and the Teacher Retirement System of Texas.
According to National Council of Real Estate Investment Fiduciaries, America's farmland capital values stepped up with an average of 4.6% annually since 1990. However, farmland rate dropped 9% in Iowa, biggest corn producer, last year due to bumper harvests.
Paul Pittman, chief executive of Farmland Partners and a former investment banker, said that farmland industry can definitely bring profits but this is a business for patient investors for "Farmland is the tortoise in a tortoise and hare race."
