Kristina Hermanson: Nuveen Natural Capital head of APAC and Africa joins the The Australian Ag podcast 2023

Why does Nuveen Natural Capital, the nation’s third largest agricultural investor, manage $2.2 billion in Australian assets?

With more than $2 billion in Australian natural and agricultural assets under management, Nuveen Natural Capital is the third largest agricultural investor in the nation.

But why does the investment arm of the massive US teachers pension fund, TIAA, want to own so much Australian farmland and natural assets?

“If we look at a population growing to nine billion by 2050, we know there is a gap in calories of output of about 60 per cent,” Nuveen Natural Capital head of APAC and Africa Kristina Hermanson told the Australian Ag Podcast.

“We see a gap of about 100 per cent for protein and not to mention 200 per cent for timber to provide the needs for that global population.

“All around the world we look for investment in farmland where we have scale and productivity gains.”

Nuveen’s overall farmland portfolio has key focus areas in horticulture, permanent plantings, viticulture and row crops.

Ms Hermanson said Nuveen was always looking for opportunities to optimise its portfolio.

“Most recently we have made investments in permanent crops like almonds and macadamias,” she said.

Last year Nuveen paid $71 million for the 343ha Macadamia Enterprises, owned by the Manera family, acquiring 106,000 macadamia trees at Calvos, south of Bundaberg in Queensland.

Previously known as Westchester, Nuveen Natural Capital manages $15 billion of agricultural investments globally as part of the $1.8 trillion US teachers pension fund TIAA.

Nuveen Natural Capital’s head of APAC and Africa Kristina Hermanson.

The global agricultural assets comprise 600 properties in 10 countries, totalling a combined 1.2 million hectares of farmland.

Ms Hermanson said of their global portfolio, 15 per cent of their total value is in Australia, which forms 30 per cent of their total farmland owned.

She also said despite rising farmland values, more land and natural capital assets were part of Nuveen’s future investment strategy.

“We have also looked at some comprehensive data out of the US and what we have seen is that farmland returns have an over 8 per cent spread over inflation,” she said.

“We are extremely well positioned in Australia to be a beacon for what natural capital can mean.

“We have a very unique biodiversity environment as an island continent and we have some good commitment from the government.

“We have a carbon commitment that has gained maturity and I think there is a lot of confidence in the carbon price and how that can evolve.”