7/30/2019 Will Political Risk be a Key Return Determinant in Farmland Investments?

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Will Political Risk be a Key Return Determinant in Farmland Investments?

FOR IMMEDIATE RELEASE, ATTENTION INVESTMENT EDITORS August 26,2013 - Calgary

Political pressures to increase restrictions on foreign ownership of farmland havebeen rising in developed markets such as Australia and New Zealand, in additionto large emerging markets for foreign agriculture investment such as Brazil,

Argentina. According to a poll by Vote Compass, more than 75 per cent ofAustralians believe the Government should tighten the rules on foreignownership of Australian farmland. Support for the proposition appears to beevenly spread between urban and rural voters and across the political continuum.Vote Compass respondents were asked for their view on this statement: "The

Government should further restrict foreign ownership of Australian agriculturalland."

Stephen Johnston, founder of Agcapita Partners LP, a Canadian farmlandinvestment fund, commented that "Agcapita believes that political risk will be akey determinant of the returns to agriculture investments hence our focus on astable market like Canada. Foreign governments and institutional investors haveonly recently been moving into the space and in a very limited way and yet theyhave already generated considerable controversy and political backlash wherethey have deployed capital into the emerging markets. We believe that this willonly become worse over time as agricultural commodity prices increase and the

issues of domestic food security and foreign control move to the top of thepolitical agenda in the emerging markets."

Agcapitas series of farmland funds continue to show great appeal toconservative investors concerned with inflation and the volatility of their existingpublic equity investments. Farmland has similar inflation hedging qualities to goldbut with an ongoing cash yield that gold lacks. Farmland returns exhibit lowvolatility and this combined with the high absolute returns from farmland equateto a favorable Sharpe ratio. Agcapitas funds directly hold diversified portfolios offarmland in western Canada, and in particular in the highly price competitiveprovince of Saskatchewan. Investors are provided with the comfort of a directinvestment in farmland combined with a model of front-end loaded cash rents.

Agcapita believes farmland is a safe investment, that supply is shrinking and thatunprecedented demand for "food, feed and fuel" will continue to move cropprices higher over the long-term. Agcapita is one of Canada's most experiencedfarmland fund managers, launching its first fund in Q1 2008.

This news release may contain certain information that is forward looking and, byits nature, such forward-looking information is subject to important risks and

7/30/2019 Will Political Risk be a Key Return Determinant in Farmland Investments?

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uncertainties. The words "anticipate," "expect," "may," "should" "estimate,""project," "outlook," "forecast" or other similar words are used to identify suchforward looking information. Those forward-looking statements herein made by

Agcapita, if any, reflect Agcapita's beliefs and assumptions based on informationavailable at the time the statements were made (including, without limitation, that

(i) the demand for agricultural commodities will continue to grow at a pace that isunlikely to be matched by growth in agricultural productivity, and (ii) investmentdemand for tangible assets such as agricultural commodities and farmland willcontinue to increase for the foreseeable future). Actual results or events maydiffer from those anticipated or predicted in these forward-looking statements,and the differences may be material. Factors which could cause actual results orevents to differ materially from current expectations include, among other things:risks associated with the ownership and operation of farmland, includingfluctuations in interest rates, rental rates and vacancy rates; general economicconditions; local real estate markets; supply and demand for farmland;competition for available farmland; weather; crop diseases; the price of grain and

other agricultural commodities; changes in legislation and the regulatoryenvironment; and international trade and global political conditions. Readers arecautioned not to place undue reliance on any forward-looking informationcontained in this news release (if any), which is given as of the date it isexpressed herein. Agcapita's undertakes no obligation to update publicly orrevise any forward-looking information, whether as a result of new information,future events or otherwise.