Sustainable farmland at heart of latest Kempen fund

In cooperation with launching customer Stichting Pensioenfonds PostNL, Kempen Capital Management (Kempen) has developed the SDG Farmland Fund.

Its aim is to enable professional investors to focus on global investment in agricultural land, while “providing a significant, concrete contribution” to the achievement of the following Sustainable Development Goals (SDGs):

  • SDG 2 – Zero hunger
  • SDG 6 – Clean water and sanitation
  • SDG 12 – Responsible consumption and production
  • SDG 13 – Climate action
  • SDG 15 – Life on land

The SDG Farmland Fund was created in close collaboration between Stichting Pensioenfonds PostNL, the Kempen fiduciary management and institutional solutions team, and the investment specialists of the private markets team.

These three parties pursue the common goal of both offering an attractive return on investment and actively promoting a shift towards more sustainable food production, Kempen said.

For this purpose, the company has identified concrete and measurable indicators (KPIs) in the field of climate change, soil health, biodiversity, water quality, and the use of resources.

Positive contribution

René van de Kieft, chairman of Stichting Pensioenfonds PostNL and member of the investment committee, explained: “Sustainability and innovation are important ground principles of our investment policy. An asset allocation towards farmland offers us a potentially attractive return on investment, as well as further diversification within our investment portfolio. The asset class of ‘agricultural land’ is pre-eminently suited to deliver a positive contribution to the pension fund’s sustainability goals.

“Particularly in the field of climate change and biodiversity, there is room for great progress and we, as a pension fund, would like to make an active contribution towards this goal. With the help and support of Kempen, our fiduciary manager, we critically reviewed all options for implementation in the past year.

“Based on the outcome of this screening, we have selected three investments, including the initiative to leverage the SDG Farmland Fund to make an active, positive contribution to the achievement of both our investment goals and our sustainable development goals.”

Good alternative to unlined real estate

Wilse Graveland and Michel Iglesias del Sol, the fiduciary managers for the pension fund, added: “Stichting Pensioenfonds PostNL is a forerunner in the field of sustainability and one of the first institutional investors in the Netherlands to include an allocation to global farmland with specific SDG objectives in their real assets portfolio.

“Investing in agricultural land is a good alternative for pension funds besides investing in unlisted real estate. The return on investments in farmland comes from strongly varying underlying factors such as productivity growth, climate, and food prices. In evaluating all the implementation options within farmland, we see that there is a lot of room for further development when it comes to sustainability.

“The SDG Farmland Fund offers a bespoke solution that allows clients to impact the actual selection of investments, a solution that reaches far beyond what is currently available on the market in terms of sustainability.”

Sustainable food chain

Richard Jacobs and Edzard Potgieser, portfolio managers with a focus on farmland within the private markets team, stated: “The SDG Farmland Fund has a seed capital of €200m and invests in farmlands located in OECD countries.

“In terms of geography and crop types, this will allow us to achieve optimal structure and diversification for our portfolio. With the help of local partners, the fund will invest both in annual crops (such as cereal grains and vegetables) and permanent crops (such as fruits and nuts). With this fund, we enable investors to team up with local farmers to promote and facilitate a significant shift towards farmland sustainability.

“These agricultural investments will enable us to help clients, such as Stichting Pensioenfonds PostNL, to implement concrete, measurable sustainability goals that will significantly contribute to a sustainable food chain.”

Kirsten Hastings

Kirsten is international editor of Expert Investor and International Adviser. She joined Last Word Media in October 2015. Kirsten has a Masters in Financial Journalism from the...

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