AGinvest sits down with Bay Street’s Blue Chip, Keith Graham and discusses why Ontario Farmland is an increasingly enticing investment opportunity.
Keith Graham has forged an impressive and rewarding career on Bay Street by keeping his thumb on the pulse of promising investments. As he transitions to a well-deserved retirement in Southwestern Ontario, another prospect is catching his attention —Farmland. We get to pick his brain about AGinvest and why farmland is a rising star in the cosmos of alternative investing.[/caption]
1. One of the most popular web searches on Bay Street right now is “Ontario farmland for sale”, why do you think that is?
Investors are looking for alternative assets that have attractive return characteristics and are uncorrelated to traditional equity and bond markets. Farmland fits this mold and is, I believe, the last trillion dollar sized asset class that has not been “institutionalized” yet.
2. How could investing in farmland help my portfolio?
Farmland can provide an attractive return profile with lower volatility than other more traditional asset classes. When looking at its history, Farmland has provided some of the highest levels of return over medium and longer term periods. With traditional equity and bond markets at all time highs, the conservative profile of “Real Assets” such as Farmland can help protect and grow your portfolio.
3. As a local to Chatham-Kent, what stands out to you about Southwestern Ontario? What makes its farmland desirable as an alternative investment?
Southwestern Ontario has a particularly attractive geography for farmland for several reasons. It has well-developed agricultural infrastructure, significant fresh water resources, and a great growing climate. Furthermore, an argument can be made that future conditions influenced by Climate Change will further benefit the growing environment in this region.
The rich soil conditions allow for significant crop diversity which can drive higher returns. These many features when combined with the unique experience set of the AGinvest team means we can turbocharge returns in the space. Strategically buying the “right land” at the “right price” and then optimizing the acquired land is how we achieve strong returns for investors.
4. What kind of professionals are investing in Ontario farmland?
All types of investors are investing in Ontario farmland. These include large institutions, high net worth individuals, family offices and even global investors. The asset class is well suited for any type of accredited investor.
5. How do I get a piece of the action without owning and operating a farm?
If you become a shareholder of Farmland One, you become a shareholder in a company that owns and actively manages farmland and markets its crop production. The ownership structure enables you to utilize the lifetime capital gains exemption on the eventual sale of your shares. It’s a major bonus that the farmland ownership plans allow you to grow your investment tax free.
6. Is it a good time to buy in?
I believe that now is indeed a good time to invest in prime Ontario farmland. With other investment options at unattractive valuation levels and the risks present in the global macro-economy, I find many other alternative investment options as unattractive. Short term timing is very hard to predict and each individual has unique personal financial circumstances, so I feel that for most accredited investors Ontario’s high quality and professionally managed farmland should have a place in their portfolio.
More about Keith
Keith now lives in Chatham-Kent, having recently retired from a long Bay Street career as a Portfolio Manager and Senior Executive in the Investment Industry. He has broad investment, management, and governance experience. Keith is the Founder and President of Rondeau Capital Inc., a private investment and advisory firm.
Keith is currently a Director of Element Fleet Management (EFN on TSX), advises the Board of the Saskatchewan Public Employees’ Pension Plan (PEPP), and sits on the Investment Committee of Ronald McDonald House Charities of Toronto where he was also a Board Member and Board Chair for a number of years. Keith is a shareholder and Director of AGinvest Properties and an investor in Farmland One. He holds the Chartered Financial Analyst (CFA) designation and has an MBA from the Ivey Business School at Western University.
Author: Sarah Taylor, Writer at 42 North Integrated Marketing