New Zealand pension fund shops for offshore farm investments
New Zealand's state pension fund is looking at buying overseas farmland amid growing demand for food in emerging markets, and it is also interested in assets offered by struggling European banks as well as catastrophe insurance.
Crop, dairy and livestock farming operations in North and South America, Australia and Europe are potentially attractive, Matt Whineray, general manager of investments at the NZ$21 billion ($17.5 billion) New Zealand Superannuation Fund told Reuters in an interview.
"If we go and buy a farm, we will sell a little bit of global equities and fixed income," Whineray said, adding that the fund was looking to increase its allocation for rural farmland to 3 percent from less than 1 percent at the moment.
As of November, the fund's portfolio was 60 percent global equities, 9 percent fixed income, 8 percent infrastructure, and 7 percent timber investments. New Zealand equities accounted for 5 percent, while the rest included property, other private markets, private equity and rural farmland.
The fund generated an actual return of 19.2 percent in 2012, outperforming its long-term goal of at least 2.5 percent on average above the rate of risk-free New Zealand Treasury bills, which was 4.9 percent.
The advent of a rising middle class in many emerging economies such as China and Indonesia has prompted other pension funds around the world, including those Australia, Canada and Sweden, to increase investments in farms.
But the difficulties of directly buying land overseas and the lack of large size farmland available has proved a challenge for big institutional investors.
"Farms
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