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Alternative Market Briefing

Investing in agricultural land is the way to go – Part One

Thursday, August 26, 2010

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Hugh Hendry
Benedicte Gravrand, Opalesque London:

Agricultural investing, even with its shortcomings, is attracting much interest from investors and from fund managers. The main reasons for are, for one, the rising global population and the dwindling available land; and secondly, the search for an inflation hedge and for real assets which are uncorrelated to financial markets.

Furthermore, some fund managers argue that investing in food commodities is not enough: buying the land – as a fixed resource - that grows them should be an integral part of an agricultural portfolio.

Agricultural commodities are sought after as prices are climbing “If you look for a weighted portfolio, you really should have something that grows,” Anthony Ward, head of London commodities house Armajaro told Opalesque earlier this year (not long before the big $1bn cocoa story). The world population is growing, the weather is changing due to global warming, and water shortages are expected to develop. So commodities – which will reflect these issues - should be included, alongside stocks and bonds. They are a good inflation hedge and “tell you about what’s going on in the world.” (See Opalesque Exclusive here).

Hugh Hendry, CEO of L......................

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