Investment funds worldwide after large farms in response to roaring investors´ demand to buy farmland assets
With many agricultural commodity prices at multi-year highs, buying farmland is seen as a more direct way to cash in on valuable crops and to take advantage of long-term appreciation of farm property. This is done by farm syndicates or direct ownership.
As a result, investment funds worldwide have put an estimated $20 billion to $30 billion in agriculture globally, and interest is also growing from ultra-rich investors and pension funds, which see farmland as tangible, strategic assets.
Private funds are not the only ones planning farm operations. As an example, with the purpose of ensuring food security, the state-owned Libyan Foreign Investment Company (Lafico) has set up a company dedicated to investment in agricultural projects abroad, with ongoing attempts to plant wheat in Argentina and Brazil.
Potentially higher returns are possible in emerging markets, where entry values are low or agricultural production is currently underperforming. Thus, farm areas in Eastern Europe, Africa and especially South America have become hotspots for farmland investing. These countries stand out as having the best potential for direct investment for those with a three-year investment horizon.
South America is today worldwide considered a top place to buy, lease and manage agricultural lands for profit. Argentina stands out among the other countries for its blessed soil and weather conditions, an abundance of natural resources, great infrastructure and the unique possibility of acquiring large extension of productive farmland.
As the prime land available for agricultural production around the world becomes increasingly scarce, yield will be key to maintaining food supplies in the future. There are few agricultural economies that can compete with the yields obtained by the Argentine farmers, showing high returns on investment compared with other major food export producing countries.
Gateway to South America is an independent facilitating and advisory company committed to helping investors from around the world, find excellent investing opportunities.
However, farmland investments can be a minefield for the inexperienced and investment funds often scramble to build up a local rural expertise. Several investment managers have struggled to bridge the gap between Wall Street and the farm gate, with a constant search for farm managers who can deal well with investors and bankers alike but who understand the basics of agricultural operations and farmland issues.
Buying agricultural lands requires dealing with not only a global supply chain and lots of regulation, risks, and factors that the traditional finance professionals do not know about, but also local links. Many investors also want international holdings, requiring their advisers to navigate different tax and regulatory systems, as well as rules on foreign land ownership. That makes it hard to get access but it also presents huge opportunities. The question is, how do you get into it, how do you access the market and just as importantly how do I get out.
Gateway to South America is an experienced company specialized in advice for foreign investors who wish to invest or sell attractive properties in Argentina, Brazil, Uruguay, Paraguay, and Chile. GTSA provides Investment Farm Tours for Individuals or Small Groups that don’t want to wait for a formal tour but wish to go now. Everything is arranged for investors from accommodation, private plane, private car, inspections, and where necessary, arrange meetings with appropriate specialists.
The window is fast closing on investment opportunities of a lifetime. For the simple reason that for the first time in recent history, Argentinean, Brazilian, Chilean , Paraguayan and Uruguayan assets in USD terms offer incredible value. Why else would you see one of the world’s most savvy investors, George Soros amongst others investing so heavily in these countries agricultural sectors?
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About Geoffrey McRae
Geoffrey McRae is the founder of GTSA – Marketing. He is a New Zealander with a strong Agro-business and Real Estate background spanning over 30 years. Prior to coming to South America, he was one of Australasia’s most successful Real Estate negotiators reaching the highest level in the industry. He has a reputation as a brave and a formidable negotiator and creative ‘deal maker’. His reputation for discretion, experience, and expertise have involved him in representing some of the world’s highest profile investors. I hope you enjoy reading our news site. Please share it on your social media below.