“Stephen Johnston is Chief Investment Officer with AgCapita Partners LP, the only farmland fund that is eligible for RRSP and TFSA’s. They have approximately 60,000 acres under management so far and believe that Saskatchewan is a large opportunity for investors right now. “On a global scale, the appeal of Canadian farmland investing stems from some highly unique and sought after characteristics.” “Volatility of Canadian farmland prices has been approximately 1/4 of the S&P 500’s volatility over the last 20 years, and lower volatility equates to lower risk. Farmland typically generates higher absolute returns than listed equities over most measurement periods as well. The combination of lower volatility with these higher absolute returns leads to attractive risk adjusted returns or Sharpe Ratios. In the face of poor public market Sharpe Ratios, investor capital is moving elsewhere – one of those places is farmland.” “Farmland has a low correlation to traditional retail investments like public equities, bonds and commercial real estate. In fact, most of these traditional retail investments are exhibiting high positive cross correlations, they all move together, so it is very difficult for investors to construct truly diversified portfolios with the mainstream options. Farmland provides true diversification.” “Opportunities with emerging economies are significant, with the consumption of energy and agriculture commodities rapidly increasing; however the recent events in SinoForest highlight the difficulty of making direct investments into emerging markets. There is high risk. By way of contrast, direct investments into farmland in developed nations provide linkage to the upside of emerging market growth but without political risk, opaque accounting, dubious legal systems, etc. “Another factor to consider is what the financial world calls Counterparty Risk, which was demonstrated with the recent bankruptcy of ManFinancial Futures Brokers. Large and apparently well-funded and well-hedged institutions can go down, and it is difficult to see it coming. So rather than try to play the opportunity in agriculture by investing into intangibles like the commodity futures or ag equities, we invest directly into the actual farmland, as tangible as it gets, virtually eliminating the counterparty risk.

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