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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.
Our 2025 outlook highlights our top investment ideas and insights on the global need for housing, the strength of alternative property types, the rebirth of retail and the shifting nature of environmental, social and governance (ESG) considerations.
This paper examines the latest developments in O&M, including how innovative approaches, from drones to PV module cleaning technologies, are helping deliver better technical performance and profitability to clean energy projects.
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.
