TIAA acquires controlling interest in Westchester Group, Inc.

Oct 8, 2010
by WLJ

Teachers Insurance and Annuity Association of America (TIAA) has acquired a controlling interest in Westchester Group, Inc. (Westchester), one of the nation’s premier, independent agricultural asset managers. The transaction enhances TIAA’s agricultural investment platform for institutional investors and extends its leadership in agricultural investing. Financial terms of the transaction were not disclosed.

“TIAA and Westchester offer a fully integrated agricultural asset management platform that combines a broad global presence with world-class agricultural asset management,” said Scott C. Evans, head of asset management for TIAA-CREF.

“Institutional investors will be able to tap TIAA’s expertise and prudent approach to investing and Westchester’s nearly 25 years of experience, on-the-ground presence, local knowledge and attention to quality properties in the U.S. and Australia. We invest in farmland with a long-term view that emphasizes growth through sustainable practices.”

By joining TIAA as a standalone subsidiary, Westchester remains independent and able to exercise its unique expertise and entrepreneurial approach. 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.

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 U.S. and Australia.

“We think the long-term outlook for the agricultural asset class is favorable,” said Jose Minaya, head of TIAA’s Natural Resources Group. “The scale and diversification of our holdings, and now the combined expertise of our company and Westchester will enable us to continue to identify the highest-quality investment opportunities. We also share a long-term view of agricultural investing that emphasizes responsible stewardship of farmland and a risk-managed approach.”

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 opportunities and then develop and manage the portfolio. — WLJ