UBS Global Asset Management, the alternatives investment arm of the Zurich-based bank, is targeting the close of two or three separate accounts for its newly-formed Australia and New Zealand farmland joint venture within 18 months and six over the next few years, PERE can reveal.
Individual accounts are expected to range from $500 million to $1.5 billion each, which could give the UBS real estate team running the venture anywhere from $1 billion to $4.5 billion of firepower in the short term and as much as $9 billion over the next several years. UBS declined to comment on the progress of this venture when approached, but it is understood that investors currently expressing interest in mandates include large family offices, pension plans and sovereign wealth funds.
The UBS Asia-Pacific real estate team set up the Australia and New Zealand farmland advisory capability as a joint venture with Bydand Global Agriculture, an Australia-based farmland operator. It currently is managed out of Sydney and Hong Kong by a specialist farmland team within the real estate business, according to an earlier UBS statement, and started with an initial $200 million capital injection.
UBS has 25 years of farmland investment experience in the US, but this is the first such venture the firm has set up in the Asia-Pacific region. “Australia is an important supplier of high-quality, traceable food to key export markets, in particular Asia, with growing demand for such products,” said Trevor Cooke, UBS’s global head of real estate for Asia-Pacific, in the statement. “Our farmland investment capability will look to attract much-needed equity capital to support growth and expansion of the agricultural sectors across Australia to meet this increasing demand.”
Indeed, it is understood that several investors are attracted to this venture for food security for their home country, especially sovereign wealth funds. The intention is to secure some of Australia’s food exports for their home country with UBS’s separate accounts. Cooked called this “another step in further developing and strengthening UBS Global Asset Management’s real estate presence in [Asia-Pacific].”
UBS Global Asset Management’s real estate business currently has $66 billion in assets under management globally, but only about 20 percent of that has been committed to the Asia-Pacific region. In October, the firm formed a joint venture with Australian developer Grocon, with the goal of growing the platform to $10 billion in five years. So far, however, it has not publicly announced any deals.