The company said the transaction enhances TIAA’s agricultural investment platform for institutional investors and extends its leadership in agricultural investing.
By joining TIAA as a standalone subsidiary, Westchester remains independent. Randall Pope, Westchester’s president and chief operating officer, will become chief executive officer of the company. Murray Wise, Westchester’s founder and chief executive, will remain a board member and adviser. Westchester’s other investment professionals will continue with the company as well.
According to a press release, TIAA is among the largest institutional investors in agriculture, with investments in more than 400 farms in North America, South America, Australia, and Eastern Europe as part of its General Account. Westchester, which has managed agricultural investments on behalf of TIAA since the inception of TIAA’s agricultural portfolio, manages more than $1 billion in agricultural assets and nearly 320,000 acres throughout the United States and Australia.
TIAA said farmland, with its historically stable returns, differs from other asset types in its market cycles and can potentially reduce volatility relative to a well-diversified portfolio of stocks, bonds and real estate as well as provide a hedge against inflation. TIAA employs a variety of structures in making its farmland investments, with a focus on acquiring equity ownership in the underlying land. The company employs or partners with premier agricultural asset managers to source farmland investment opportunities and then develop and manage the portfolio.
Agricultural investments occur within TIAA’s General Account, an insurance company general operating account. The performance of the investments held in the TIAA General Account support the TIAA Traditional Annuity’s guarantees of principal, minimum guaranteed returns, additional amounts and payout obligations. The General Account primarily invests in corporate and government bonds, structured finance instruments, and real estate.“Together, our experience and expertise will enable us to achieve the ownership and investment objectives of institutional clients, as well as attracting new institutional investment capital to the agricultural marketplace,” said Pope, in the announcement.