NEW YORK - Investor interest in agriculture is continuing to rise and investment experts expect to double assets under management in the next three years, according to a survey.
But several factors, including the lack of transparency of this still-emerging asset class, are making some investors skittish.
"That is one of the main issues," said Bill Kiernan, director of research for global agriculture investment at consulting firm HighQuest Partners.
"The whole idea of investing into agriculture as a sector ... is really pretty new and it has been growing pretty fast. So you have a lot of investment managers out there who are launching fairly new funds and they have not yet established a track record. The lack of track record and a lack of benchmarks in the industry makes some investors nervous."
But they are curious. An estimated 700 people attended the Global AgInvesting 2012 conference in New York this week, roughly double the attendance just three years ago at the annual event. Some 33 percent were investors, 41 percent investment managers and the rest various industry participants.
Of those attending, agriculture-focused investment managers with $16.2 billion in assets under management said interest in the sector is so strong that they expected to add $17.3 billion to their portfolios over the next three years, according to a survey of conference attendees conducted by HighQuest.
Diversified investment managers with portfolios of about $3.6 billion expect another $3.4 billion, according to the survey results.
Row crop farmland remains a key areas of interest, as corn, soybeans and other crops command high prices in the marketplace amid strong demand for food and fuel.
Investors are also eyeing infrastructure investments such as storage facilities and transportation operations, according to the survey.
Investment managers said rising U.S. farmland prices were making it harder to find quality land and high returns, and a lot of capital flow is moving to developing nations.
Africa and Latin America are areas targeted for higher returns, although there has been increasing opposition to foreign land investments in Africa.
Opponents of Wall Street "land grabs" in Africa protested outside the New York conference this week, as an international group of researchers and representatives from non-governmental organizations rolled out a database showing that, although the rush by investor for global farmland has fallen from a peak in 2009, it remains active, and Africa is a top target.