Schroders has announced plans to open the Schroder Agricultural Land Fund, a Guernsey-domiciled, London Stock-Exchange-listed investment trust investing in agricultural land and land opera
Schroders has announced plans to open the Schroder Agricultural Land Fund, a Guernsey-domiciled, London Stock-Exchange-listed investment trust investing in agricultural land and land operating businesses, to investors in September.
The fund, a closed-ended investment trust, will seek to offer investors exposure to the long-term returns of agricultural land derived from growing demand for its use and productivity through investment in private equity companies, farm management businesses and related funds.
Around 25 per cent of the fund will be invested in agricultural land-related equities and commodities. The fund is targeting a net annual return of between 10 and 15 per cent over an investment period of five to 10 years.
The Schroder Agricultural Land Fund will be managed by Mark Bridgeman, one of Schroders’ most senior investment professionals, supported by an investment committee made up of specialists with property, private equity and agricultural experience, as well as external agricultural practitioners as investment advisers.
‘The demand on agricultural land is under a lot of pressure,’ Bridgeman says. ‘The world’s population is forecast to grow by 44 per cent over the next 40 years. With improved diets, food consumption is set to double. As GDP per capita increases, so does consumption of meat, which demands far higher amounts of grain.
‘However, while food consumption is on the increase, productivity improvements have slowed. There needs to be a radical change in the way that land is farmed and managed as the world adapts to the challenges of feeding itself.
‘The Schroder Agricultural Land Fund is designed to benefit from this rapidly changing landscape by investing in companies and private equity funds that will generate capital and income from the efficient management of land.’
William Hill, head of Schroder Property, says: ‘Investing in agricultural land at a global level makes sense. It has significant diversification benefits for investors with traditional commercial portfolios. The drivers behind value generation are clearly different and there is a strong long-term growth story to build on. It is an obvious product to add to our range.’
Schroders has managed property funds since 1971 and at the end of March the business had more than GBP8.9bn in gross property assets under management, excluding crossholdings. Its property team consists of more than 130 people active in property fund management, research and strategy, investor relations, finance and administration at offices in London, Wiesbaden, Amsterdam, Milan, Jersey, Paris, Luxembourg, Stockholm and Hong Kong.
