If there was any question of pension-fund interest in farmland, today's announcement that the large academic, medical, government and research pension fund TIAA has acquired controlling interest in Westchester Group, Inc., should end all doubt. TIAA is the Teachers Insurance and Annuity Association of America and is part of TIAA-CREF, a national financial services organization with $410 billion in combined assets under management providing retirement services to nonprofit and government fields. Financial terms of the deal were not disclosed.
TIAA is among the largest institutional investors in agriculture, with investments in more than 400 farms in North America, South America, Australia and Eastern Europe. Westchester, which had managed agricultural investments on behalf of TIAA since the inception of the pension firm's agricultural portfolio, manages more than $1 billion in agricultural assets and nearly 320,000 acres throughout the United States and Australia.
In making the announcement, Jose Minaya, TIAA's Natural Resources Group, said: "We think the long-term outlook for the agricultural asset class is favorable. The scale and diversification of our holdings, and now the combined expertise of our company and Westchester will enable us to continue to identify the highest-quality investment opportunities. We also share a long-term view of agricultural investing that emphasizes responsible stewardship of farmland and a risk-managed approach."
"Farmland, with its historically stable return, differs from other asset types in its market cycles and can potentially reduce volatility relative to a well-diversified portfolio of stocks, bonds and real estate as well as provide a hedge against inflation," the press release states. "TIAA employs a variety of structures in making its farmland investments, with a focus on acquiring equity ownership in the underlying land."
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