TIAA-CREF Asset Management manages a wide range of assets spanning a variety of portfolios. Learn more about how we implement our innovative investment strategies through these short case studies from around the globe.
WITH JOSE MINAYA, MANAGING DIRECTOR, NATURAL RESOURCES & AND INFRASTRUCTURE INVESTMENTS
In the TIAA-CREF agriculture portfolio, social responsibility goes hand-in-hand with global investing. The organization’s analysts recognize the value of international investing in socially-responsible and environmentally-friendly ways. This idea pervades many of the organization’s investment decisions and impacts various TIAA-CREF portfolios.
An example of these initiatives is TIAA-CREF’s farmland investments, which span across many of the major grain producing regions of the world. Australia farmland is one of the cornerstones of the TIAA-CREF agriculture portfolio. The country allows for large-scale land purchases, and the land and climate are agreeable for a diverse selection of crops, including cotton, grain, barley, and wheat.
Australia farmland is particularly unique as it has a volatile profile when the seasons change from periods of drought to severe rainfall. The dramatic seasons have bred a community of highly experienced farmers who have adopted innovative technology and creative approaches to farming in order to maximize output under challenging conditions.
TIAA-CREF analysts also recognize the opportunity that Australia’s proximity to Asia provides. Asia’s population growth has an increasing demand for food and clothing. Australian farmlands produce commodities that serve to meet those demands and deliver them in a cost effective manner to the Asian market.
“It’s a food and fiber story. Australia’s proximity to Asia is an important aspect for TIAA-CREF’s portfolio because Asia is a very big factor in the global demand for food and fiber,” said Jose Minaya, Managing Director, Natural Resources & Infrastructure Investments.
In February 2008, TIAA-CREF acquired Milo Farm in New South Wales, Australia, near Moree in the Gwydir Valley — one of the leading cotton producing districts in the country. The farm is a large row crop property (cotton, wheat, and sorghum) with 21,194 tillable acres and best-in-class water irrigation and on-farm water storage capacity. The scale of the property and efficiency of the water irrigation system are what set this farm apart from other assets in the TIAA-CREF agricultural portfolio.
“Milo has over 26,000 mega liters of water, which TIAA employees and the farm operators can access through water rights, and the ability and infrastructure to move that water efficiently through the property,” added Minaya.
Access to water and rainfall is one of the most important factors that the organization’s analysts consider before acquiring farmland. Especially in Australia, where the country goes from periods of drought to severe rainfall, water rights are significant to the agriculture portfolio. The property’s ability to capture and store water is also vital to its productivity.
At Milo Farm, TIAA employees work hand-in-hand with experienced farmers and the community to implement and develop sustainable water irrigation and water capture/storage systems. These practices include moving the water along the farm, reducing evaporation, storing the water in holding tanks, and maximizing the water pulled from the river systems and rainfall.
TIAA-CREF’s capital and the tenant farmers’ deep knowledge of the land and irrigation needed for a large property like Milo is a mutually beneficial combination. The type of system that can sustain and move over 26,000 mega liters across over 21,000 acres requires a lot of advanced equipment, manpower, strategic planning, and capital.
Water is an element that is not just important to TIAA-CREF as the investor, but is also important to the community and the country. Local governments and municipalities are highly incentivized to motivate operators and owners to deploy sustainable water practices, and TIAA employees and local farmers implement best practices as a socially responsible duty to the community and land.
TIAA’s Farmland investments are just one of many investments of TIAA’s General Account, an account solely owned by TIAA that is not available to individual investors and whose performance is not directly allocated to any specific contract or obligation. TIAA’s General Account invests in a broad range of diversified investments to support TIAA’s contractual guarantees and business operations.
Past performance is not indicative of future results. The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
Daily oil usage is expected to rise to over 100 million barrels of oil equivalent (BOE) by 2030 1; so, the market for oil, coal, natural gas, and alternative energy sources is steadily increasing.
While world food, stock feed and bio-fuel demand is increasing, the global supply of arable land is shrinking.* This imbalance underscores the investment logic of TIAA-CREF’s strategic acquisition and responsible management of prime agricultural land around the globe.
Anticipating the economic momentum of sustainable food production, TIAA-CREF has established a portfolio of strategic agricultural assets in some of the world’s most productive areas. The organization has acquired more than 400 farms located across the U.S., Australia, Brazil, and Eastern Europe.
© 2012 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund, New York, NY 10017
Past performance is not indicative of future results. The information on this website should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
TIAA-CREF Asset Management provides investment advice and portfolio management services for the TIAA-CREF group of companies through our investment advisers including Teachers Advisors, Inc., a registered investment adviser and wholly-owned indirect subsidiary of Teachers Insurance and Annuity Association (TIAA). TIAA® personnel in its investment management area provide investment advice and portfolio management services through the following entities: Teachers Advisors, Inc., TIAA-CREF Investment Management, LLC, and Teachers Insurance and Annuity Association® (TIAA®). TIAA, TIAA-CREF, Teachers Insurance and Annuity Association, and TIAA-CREF Asset Management are registered trademarks of Teachers Insurance and Annuity Association.