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How Westchester identifies and evaluates farmland suitable for institutional investment

Farm aerial view

Westchester was founded in 1986 and currently manages more than two million acres scattered over four continents. This long history and significant management area has afforded Westchester unique insights into farmland suitable for institutional investment. Westchester remains a strong proponent of the notion that a globally diversified portfolio is the best way to invest in farmland assets. Geographic diversification, when properly executed, can mitigate the effects of external local risk factors such as adverse weather and price volatility.

To execute geographic diversification effectively, one must first source the farmland opportunities in their respective global locations. Therein lies the question – how does Westchester determine which countries and regions are investable?

This paper examines the availability of farmland globally in acres. We outline the process Westchester undertakes to analyze and filter the world’s available farmland down to an investable universe that is suited for institutional investment. Finally, we outline the methodology by which we estimate the value of this investable universe.

 Exhibit 4: Westchester’s current investable geographies and estimated market value

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Dimitrios N. Stathopoulos
Head of Americas Institutional Advisory Services

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors. The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on factors such as market conditions or legal and regulatory developments. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions made in preparing this material could have a material impact on the information presented herein. Past performance is no guarantee of future results. Investing involves risk; principal loss is possible. This information does not constitute investment research as defined under MiFID. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

A word on risk

As an asset class, agricultural investments are less developed, more illiquid, and less transparent compared to traditional asset classes. Agricultural investments will be subject to risks generally associated with the ownership of real estate-related assets, including changes in economic conditions, environmental risks, the cost of and ability to obtain insurance, and risks related to leasing of properties. Nuveen provides investment advisory solutions through its investment specialists.

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