Agcapita Update: US Versus Canadian Farmland Investment Environment

Calgary, Canada, September 24, 2014 --(PR.com)-- In the US investors have access to farmland through public market vehicles in the form of REITS that acquire farm and timberland. For example Gladstone Land (LAND) which owns 6,833 acres across the US and Farmland Partners (FPI) with 23,630 acres.

The public REIT structure does not suit the Canadian capital markets well given the restrictions in place in the key prairie markets. This leaves investors seeking exposure to Canadian farmland to deploy capital through private investment vehicles. There are a small number of Canadian managers with a full life cycle track record – invest, monitor and divest - Agcapita being one of the oldest and most experienced in this category.

Further to this Agcapita is pleased to announce that Agcapita Fund V has launched. Agcapita Fund V and is the only RRSP eligible farmland investment vehicle in Canada. If you would like to receive information about Agcapita Fund V please feel free to contact us at Fund5@agcapita.com or register online at the Agcapita website.

Stephen Johnston, co-founder of Agcapita, commented, "Agcapita believes that prices of Canada farmland, in particular Saskatchewan farmland, are discounted to world averages for a ton of productive capacity. Part of our investment premise is that this gap will close and with the attention that Canadian farmland is receiving from investors it can obviously happen quite quickly. It is this "margin of safety" return driver that attracted us to Canada and Saskatchewan in the first place.”

According to Karim Kadry, Agcapita’s Investment Manager, “Agcapita believes that farmland will continue to show great appeal to conservative investors concerned with inflation and the volatility of their existing public equity investments. Canadian farmland has similar inflation hedging qualities to gold but with an ongoing cash yield that gold lacks. We are now seeing large institutional investors recognize these qualities with CPPIB acquiring 120,000 acres of Saskatchewan farmland in a single transaction worth in excess of $120 million.”

Johnston added “Canadian farmland returns have exhibited low volatility and this combined with higher absolute returns equate to a favorable Sharpe ratio. Agcapita’s funds directly hold diversified portfolios of farmland in western Canada, and in particular in the highly price competitive province of Saskatchewan. Agcapita’s funds give investors the benefit of a direct investment in farmland combined with a model of front-end loaded cash rents. Agcapita is one of Canada's most experienced farmland fund managers, launching its first fund in 2008.”

This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," "expect," "may," "should" "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by Agcapita, if any, reflect Agcapita's beliefs and assumptions based on information available at the time the statements were made (including, without limitation, that (i) the demand for agricultural commodities will continue to grow at a pace that is unlikely to be matched by growth in agricultural productivity, and (ii) investment demand for tangible assets such as agricultural commodities and farmland will continue to increase for the foreseeable future). Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of farmland, including fluctuations in interest rates, rental rates and vacancy rates; general economic conditions; local real estate markets; supply and demand for farmland; competition for available farmland; weather; crop diseases; the price of grain and other agricultural commodities; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. Agcapita undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.