TIAA-CREF closed its second farmland partnership, the $3 billion TIAA-CREF Global Agriculture II, said Jose Minaya, senior managing director and head of private markets asset management at TIAA-CREF Asset Management. Total capital raised exceeded its $2.5 billion target and hit its hard cap.
The new partnership also is larger than TIAA-CREF’s first farmland partnership, the $2 billion TIAA-CREF Global Agriculture I, which closed in May 2012.
TIAA-CREF’s second farmland partnership will invest in high-quality farmland in North America, South America and Australia.
The partnership’s 20 investors include the 293.9 billion kronor ($33.9 billion) AP2, Gothenburg; $20.5 billion New Mexico State Investment Council, Santa Fe; $1.52 billion Cummins U.K. Pension Plan Trustee, Darlington, England; and £16 billion ($24.8 billion) Greater Manchester Pension Partnership, Manchester, England.
TIAA-CREF’s new farmland partnership is a company rather than a fund to allow the firm to hold the properties for a longer period than the typical 10 years of a private equity-style fund, Mr. Minaya said.
“All the investors committed to holding the assets for over 20 years,” he said. The partnership has a target lifespan of 21 years.
In addition, the company provides better transparency and governance, Mr. Minaya said.
“Farmland is not something you want to lever or flip in the short term,” he said. “None of our investors are making a bet on increased growth. We built something more attuned to a long-term investor just like us.”
TIAA-CREF executives prefer the company model for its own investments, Mr. Minaya said. “We attract investors who are like-minded to us,” he said.
