The First Swedish National Pension Fund, AP1, has invested SEK444m (€48m) in Southern Pastures, the largest institutional farmland fund in New Zealand.

The stake represents the first agricultural investment in AP1’s SEK266.7bn portfolio, although it already invests in 20 agricultural properties in Australia and around 10 in Zealand, the latter in Southern Pastures.

Ossian Ekdahl, head of communication and ESG at AP1, said: “The intention is for the investments to provide a long-term stable and secure return and, through a differing return pattern, for these to contribute as a complement to the rest of the portfolio.”

Southern Pastures was launched in March 2012 with AP1 and a number of individuals as the initial limited partners.

Total net assets under management, including committed capital, currently total NZD320m (€202m), with a target of NZD350m, and final close set for 31 December 2014.

Southern Pastures’s mission is to produce the finest quality milk using sustainable farming methods emphasising innovation, integrity and social responsibility and using the highest ethical standards to promote growth within its farms.

Ekdahl said: “The emphasis on ESG was a factor we evaluated and appreciated. Analysis of sustainability factors is handled as an integral part of AP1’s evaluation process before an investment decision is made.

“The focus here was on ensuring the agricultural activities were conducted in a responsible and long-term, sustainable manner, thereby minimising operational risks.” 

The investment is booked in the fund’s new investments portfolio.

AP1 declined to comment on expected returns, but said the new investments portfolio returned 4.5% for the first six months of 2014, compared with 6.5% for the portfolio as a whole, after expenses.

However, Ekdahl said there was no target allocation for the dairy sector within AP1’s portfolio.

Meanwhile AP3, the Third Swedish National Pension Fund, and Norwegian pensions provider Storebrand have invested in a private placement of shares in Cortendo, a global biopharmaceutical company.

The company, based in the US but incorporated in Sweden, develops products to treat orphan endocrine disorders.

Both institutions were already investors in the company.

AP3 invested SEK19.4m, taking its shareholding to 9.4% of the company, while Storebrand’s injection brings its stake to 9.8%.

The other investors participating in the issue were HealthCap, a European venture capital company investing in life sciences, and Arctic Fund Management, with a total of SEK81.5m raised.

The private placement is intended to provide financing and a widened access to resources, in order to advance corporate goals and develop Cortendo’s lead drug candidate COR-003, used to treat Cushing’s syndrome and currently undergoing global trials.

Ulrica Slåne, portfolio manager for life science at AP3, said: “Our investment in Cortendo is a good example of AP3’s healthcare strategy to provide promising companies with the financial capabilities to reach the market with new innovative medicines, and the potential to provide AP3 with a good return on our investments.”

Cortendo will now evaluate alternative options, including a US financing and listing strategy.

The US represents the largest potential market for COR-003.

Lastly, Folketrygdfondet, the Norwegian government pension fund, has sold its 6.4% stake in Cermaq, the international fish farming group based in Oslo, to Mitsubishi Corporation, for NOK570m (€67.4m).

Olaug Svarva, chief executive at Folketrygdfondet, said: “Combined with the sale of Cermaq’s feed business to the private equity funds Altor and Bain Capital last year, this sale will generate a strong return for shareholders.

“However, we consider aquaculture a strategically important industry with major growth potential and therefore intend to retain significant investments in other companies in the sector.”

Svarva said she expected continued strong value growth in the aquaculture industry.

She said aquaculture companies accounted for 5.1% of the assets on the Oslo Stock Exchange, with a total market value of NOK89bn, as at 15 October.

In contrast, 10 years ago, the industry accounted for just 0.4% of the total assets represented on the same exchange.

The Norwegian government has also sold its 59.17% stake in Cermaq to Mitsubishi, which was to complete its purchase of all Cermaq shares during November.

Topics