Canada's CPPIB to buy farmland portfolio in Saskatchewan
By Euan Rocha and Rod Nickel
TORONTO/WINNIPEG (Reuters) - The Canada Pension Plan Investment Board (CPPIB) said on Thursday it had agreed to acquire the assets of Assiniboia Farmland, a fund that owns and manages a large portfolio of farmland in Saskatchewan, for about C$128 million.
CPPIB, one of Canada's top pension fund managers with more than C$192.8 billion ($181 billion) in assets under management, said Assiniboia's diversified portfolio consists of 115,000 acres of farmland that produce crops like wheat, barley and canola.
The existing management team of the fund, which was created in 2005, will continue to manage the land portfolio, said CPPIB.
Sovereign wealth funds and large pension funds like Canada's CPPIB, seeking long-life revenue generating assets, are making a number of big bets in physical assets like farmland and forests, along with investments in ports, hydro-electric power projects and other such assets.
Last year, CPPIB launched its agriculture investment program which is initially focusing on farmland opportunities in Canada, the United States, Australia, New Zealand and Brazil.
This is CPPIB's second investment in farmland, since setting up its agriculture investment program. Last year, CPPIB made its first foray in the sector, buying a large parcel of land that is spread across different parts of the United States.
"Agricultural land is an important asset class for us," André Bourbonnais, CPPIB head of private investments, said in a phone interview. "Such investments align well with CPPIB's long-term investment strategy, while further diversifying our portfolio."
Canadian farmland values have risen steadily over the past decade, with the average value jumping 10 percent during the second half of 2012, according to the latest data from Farm Credit Canada (FCC), the country's biggest agricultural lender. Continued...