Firms & Funds

Louisiana Teachers’ forms $75 mln agriculture account

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Flooded farm buildings are seen near Lake Providence, Louisiana May 18, 2011. Floodwater released from a key Mississippi River spillway surged through the Louisiana bayou on Tuesday, and levees protecting the state's two biggest cities held as river flows neared their peak. Weeks of heavy rains and runoff from an unusually snowy winter caused the Mississippi River to rise, flooding thousands of homes and 3 million acres (1.2 million hectares) of farmland in Mississippi, Tennessee and Arkansas and evoking comparisons to historic floods in 1927 and 1937. REUTERS/Eric Thayer (UNITED STATES - Tags: DISASTER ENVIRONMENT AGRICULTURE) - RTR2MLMS
  • New account with Hancock to invest in farmland
  • TRSL had 1.1 pct of assets in commodities as of March 31
  • Pension also backs GSO flagship fund for $125 mln

Teachers’ Retirement System of Louisiana agreed to move forward with a $75 million separate account for investments in farmland, Deputy Chief Investment Officer Maurice Coleman said in an email.

TRSL committed $75 million to Hancock Agricultural Investment Group through its allocation to commodities on May 5, according to retirement system documents.

The $16.4 billion retirement system started investing in commodities as a distinct asset class in 2011, but it held just 1.1 percent of its assets in commodities as of March 31.

Hancock, a unit of Manulife Asset Management’s private markets division, manages $2.5 billion of agricultural farmland assets in the U.S., Canada and Australia. The unit is led by President and Managing Director Oliver Williams IV.

The Boston-based firm also manages separate accounts on behalf of Alaska Retirement Management Board, Illinois Municipal Retirement Fund and San Diego County Employees Retirement Association.

“Hancock is a leading agriculture investor with significant resources,” consultant Hamilton Lane wrote in a report for TRSL. The firm “has generated attractive performance across its prior separate accounts.”

Hancock’s assorted separate accounts were grossing a combined 1.8x multiple and 12.5 percent internal rate of return as of June 30, according to the Hamilton Lane report.

Those returns compare favorably with the Dow Jones Commodity Index for agriculture assets, which generated a 1.18 percent 10-year annualized return as of May 9.

In addition to its commitment to Hancock, TRSL committed $125 million to GSO Capital Opportunities Fund III. GSO Capital Partners, the credit arm of Blackstone Group, set a $6 billion target for its third flagship fund. Its previous two funds netted an aggregate IRR of 16.7 percent as of Dec. 31, according to a Hamilton Lane report.

Action item: For more information about Hancock Agricultural Investment Group: hancockagriculture.com