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Farmland
A novel approach to optimizing a global farmland portfolio
Nuveen Natural Capital believes that a globally diversified portfolio is the best way to invest in farmland assets. By diversifying the crop mix and geographies, investors can protect against external physical and market risk factors such as weather, crop price volatility and government intervention and regulation. But this leads to a question: what is the optimal way to construct a globally diversified farmland portfolio?
In this paper, we examine Nuveen Natural Capital’s approach to portfolio construction, outlining how we apply risk and optimization modeling to build risk-return efficient portfolios of farmland investments. We also demonstrate how an investor’s approach to currency risk has a material impact on regional allocations. Finally, we demonstrate that there are material allocation differences in optimal portfolios depending on whether an investor’s investment objective is to maximize cash yield, total return or both.
Lara Devieux dives into the latest regulatory initiatives impacting U.S. insurance company portfolios.
Don Dimitrievich, senior managing director of energy infrastructure credit, explores the competing trends in the energy supply sector.
Potential implications for oilseed demand and farm margins stemming from low carbon fuel standards and the expansion of renewable diesel refining capacity are analyzed.
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, LLC provides investment solutions through its investment specialists.
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, LLC provides investment solutions through its investment specialists.
