Palmer Capital Partners is to invest in the burgeoning agriculture market with the launch of a €300m (£238m) pan-European farmland fund.
Palmer has teamed up with Bidwells Agribusiness, part of Bidwells Property Consultants, in a bid to raise €200m (£158m) of equity to spend on farmland throughout Europe from November. With leverage, the partners hope to raise €300m (£238m).
The fund aims to ‘profit from the long-rising world demand for soft commodities and the convergence of land prices for farmland between western and eastern Europe.’
The fund is to target a net income return of 5.5% a year over a ten-year lifespan. The partners said capital growth in land prices over this period should net investors with overall returns of between 10%-15%.
The fund will be managed by Palmer’s managing director for Europe Guy Barker and Richard Warburton, who is head of Bidwells Agribusiness. Warburton said: ‘There is great potential for investors, however, this doesn’t come without certain challenges in a number of countries including fragmentation of ownership from land reform, archaic tenancy legislation and foreign ownership restrictions.’
Barker said the fund had received early interest from UK and German investors who had committed €45m (£37m).