Dai-ichi invests $50m in farmland strategy fund

Written by Michael Griffiths

16/11/2022

The Dai-ichi Life Insurance Company has announced a $50m investment in a farmland strategy fund managed by Nuveen Natural Capital.

The Nuveen Global Farmland Fund Lux SCSp marks Dai-ichi’s first ever investment in a farmland strategy fund.

Dai-ichi revealed the fund primarily invests in farmland and related businesses, located in the US, Australia, and across other parts of the world. This farmland is used to produce a rich variety of crops, including annual crops such as wheat and corn, as well as perennial crops such as wine grapes and almonds.

“Through variance in crop cycles between the northern and southern hemispheres, the fund realises diversified and distributed year-round income,” a Dai-ichi statement said. “Through its investment, the company seeks to ensure a stable supply of food, and to help stabilise incomes for farmers.

“By establishing solar panels and water circulation systems on farmland, the company also intends to promote sustainable, environmentally friendly agriculture through the reduction of greenhouse gas emissions and the preservation of water resources, and expects to contribute to wide-ranging Sustainable Development Goals (SDGs).”

Investments in farmland assets can be expected to be highly profitable even during periods of financial market turmoil, due to stable sales revenues from agricultural produce and farmland leasing fees. At the same time, since they have low correlation to traditional assets such as stocks and bonds, farmland assets are a way of diversifying investments and as such can help contribute to stable, long-term investment earnings from a company’s portfolio.

As a universal owner that manages assets worth approximately ¥38trn sourced from insurance premiums of customers throughout Japan, Dai-ichi has been promoting ESG investments.

“The company as a responsible institutional investor will continue to actively engage in ESG investment to contribute to realising a sustainable society as well as to improve its investment return through sophisticated and diverse investment methods,” it added.

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