Sustainable Farmland Trust announces £200 million IPO

Sustainable Farmland Trust announces £200 million IPO

LONDON, UK: The Sustainable Farmland Trust Plc announced its intention to launch an initial public offering (IPO) on the Premium Segment of the Official List of the FCA and to begin trading on the Main Market of the London Stock Exchange, by way of a placing, offer for subscription and intermediaries offer targeting the issue of 200 million ordinary shares in the capital of the Company at an issue price of £1.00 per Ordinary Share.

The Company expects to publish a prospectus in due course, to also provide for a 12-month placing programme of Ordinary Shares and/or C shares convertible into Ordinary Shares.

The Company’s investment objective is to provide Shareholders with an attractive level of risk-adjusted income together with the potential for capital growth by investing in a diversified portfolio of farmland and related agriculture-focused assets (“Farmland Investments”) predominantly located in the US.

Whilst not forming part of the Company’s investment policy, the Company will aim to deliver a target NAV total return of 7 per cent to 9 per cent. per annum (net of all fees, expenses and taxes) on the basis of the Initial Issue Price, once fully invested, and a target annual dividend yield of at least 4.5 per cent on the basis of the Initial Issue Price.

The Company’s Investment Manager, Intl Farming Investment Management, LLC and its affiliates (together, “IFC”) is based in the US and entirely dedicated to agricultural asset management, with over US$2.2bn in group assets under management1, an established track record in the sector since its inception in 2009, and family roots in agribusiness dating back to 1827.

As a market leader in farmland investing, IFC has owned or managed approximately 420,000 farmland and ranchland acres across over 18 US states, two Australian states and Chile, cultivating more than 80 crop types.

The Company will invest in a performing and diverse portfolio of US farmland assets held in the IFC Core Farmland Fund, LP, an existing private fund managed by the IFC’s investment management team and, additionally, in direct farming and agricultural supply chain and infrastructure assets (“Core Plus Assets”) predominantly located in the US, which are expected to generate current income and to provide for potential capital growth.

Not only are returns from farmland assets historically negatively correlated to equity market movements, but they also exhibit a historical positive correlation with inflation and are anticipated to be accretive in a high inflationary environment.

The Company will seek to promote sustainability by delivering a secure and reliable food supply through its Farmland Investments, with an investment process that considers key environmental factors in keeping with IFC’s commitment to “leave the land better than we found it®”. The Company will focus on acting as a responsible steward for the subsequent management of these investments, including the land and its tenants and/or operators.

Key Highlights

· The Company is targeting gross IPO proceeds of £200 million by means of a placing, offer for subscription and intermediaries offer priced at £1.00 per Ordinary Share

· The Company is targeting a net initial yield of 4.5 per cent and a NAV total return of 7 per cent to 9 per cent per annum on the basis of the Initial Issue Price, once fully invested

· Farmland is historically negatively correlated to equity markets, provides stable income, and is expected to outperform in an inflationary environment

· Investing in farmland assets is critical to ensuring food for the growing global population, and IFC is committed to being a leading manager in the enhanced stewardship of farmland using measurable sustainable practices

Andy Crossley, Chair of The Sustainable Farmland Trust commented: “We are delighted to be launching the first farmland-focused investment company listed on the London Stock Exchange. We believe that the Company is perfectly positioned for the current inflationary environment, with outstanding risk adjusted economic returns while also providing a sustainable and appropriately managed food source. We believe this unique and highly scalable asset class has enormous potential to provide long-term returns from a combination of both income and capital growth that historically outperform further in an inflationary environment.”

Charlie McNairy, Chief Investment Officer of Intl Farming Investment Management, LLC commented: “We are proud of our deep agricultural heritage and the track record we have built at IFC managing over 420,000 acres, with a technology focused approach yielding both income and capital growth. Our proven track record of success has perfectly positioned us to launch The Sustainable Farmland Trust today at a highly opportune time in the sector. We believe that the long-term secular trends, rapidly changing farmer demographics and inflationary economic environment makes this a particularly attractive asset class for investors seeking inflation protection and portfolio diversification.”

Add a Comment

Your email address will not be published. Required fields are marked *