Vulpes Investment Management, an investment firm with offices in Geneva and Singapore, is looking to increase its investments in farmlands across the world, attracted by “returns of 5% to 10%” and long-term profitability.
The company wants to raise between $50 million (€38.6 million) and $150 million in the next few months to expand its farm-focused fund Vulpes Agricultural Land Investment Company into Africa and eastern Europe.
“Investing in agriculture, and in agricultural land in particular, holds a significant appeal against inflation,” David Pitcairn, managing director at Vulpes, told CampdenFB, adding that he expects this sector to remain attractive in the future, as the global population continues to increase.
He reckons the fund will make "total return of 5% to 10%" but possibly more if inflation increases.
Since it was launched in 2009, Valic has raised $35 million, and owns a number of farms across the world. In the US, it has about 2,000 acres (809 hectares) of corn fields that yielded 7% since they were acquired in 2009.
It also owns a 3,500-hectare cattle and sheep farm in Uruguay that had returns of 3% since 2010, and a kiwifruit and avocado farm in New Zealand that returned 14% in the past 12 months.
Now Vulpes, which has about $220 million in assets under management, wants to expand into countries such as Zambia, Malawi and Mozambique, as well as Ukraine and Bulgaria, to diversify its portfolio “by geography, climate, agricultural sector [...] and currency”, according to a statement issued by the company.
Vulpes’s move follows recent research by Campden, which found that investments in real estate and agricultural land proved popular with European family offices in 2011 – family offices considered them “safe, tangible, long-term investments” that could “generate inflation-proof sources of income”, the report said.
Correction: This article initially stated that Vulpes is expecting “mid-to-high teens” returns. David Pitcarn contacted CampdenFB on 15 May to say the firm is expecting 5% to 10% returns. We are happy to make this change.