Sweden’s AP2 and TIAA-CREF form agricultural real estate venture

Sweden’s SEK222.5bn (€158bn) Andra AP-fonden (AP2) and $453bn (€322bn) US retirement provider TIAA–CREF are to form a joint venture to invest in agricultural real estate in the US, Australia and Brazil.
AP2 said it will invest about $250m in a newly formed company that will acquire and manage agricultural real estate – with TIAA–CREF as the majority shareholder and administrator.
“The company will first and foremost invest in grain production,” the buffer fund said in a statement.

AP2 has only teamed up with TIAA–CREF following a “comprehensive” sustainability analysis of its fellow UN Principles for Responsible Investment signatory’s procedures.
AP2 added TIAA–CREF has a well-developed platform for agricultural investment where environmental considerations and social responsibility are integrated. The move into the stable returns of agricultural land is part of AP2’s portfolio diversification plans.“TIAA–CREF enjoys an excellent reputation, not least for its active and progressive work in corporate governance and sustainability,” said AP2 chief executive Eva Halvarsson. “We anticipate that the newly established company’s investments will promote productivity gains and long-term, well-managed and profitable agriculture that, in a sustainable manner, will help meet the growing global demand.”
The investment comes as global food commodity prices are rising, driven changing global consumption patterns, climate change – and accusations that pension investors are themselves contributing to higher valuations.
Just this month, for example, a report from Christian Aid claimed pension funds are partly responsible for driving p food prices globally. “Food has now become a financial commodity, to be traded and bet against just like any other, such as copper or oil,” it said.