Westchester Group Investment Management, an investment specialist of Nuveen, 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, Nuveen examines Westchester’s approach to portfolio construction, outlining how it applies risk and optimization modeling to build risk/return-efficient portfolios of farmland investments. Nuveen also demonstrates how an investor’s approach to currency risk has a material impact on regional allocations. Finally, the paper demonstrates 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.
We host white papers and reports written by industry experts as part of our 'Preqin Picks' series on Preqin Insights. Curated by our in-house Content team, this option is available exclusively to Preqin clients. Please contact your Sales Account Manager if you'd like to explore this opportunity.