Investing in agricultural land and agricultural activities is another area serving as a diversifier for DB plans in part due to heightened prices for grain and protein products, which in turn has boosted farm income to unprecedented levels, according to Mayssa Al Midani and Alex Howson, managers of the Pictet nutrition strategy, which invests in sustainable food production. The fund has $2.5 billion in assets under management.

Though the returns are closely tied to the commodity cycle, the value of high-quality farmland has robust structural support as an investment, they said in an email.

“Global food demand is projected to grow by 60% to 2050, driven by an increase in population from 8 billion today to 10 billion by 2050, as well as from increased demand from a growing middle class in developing markets,” they said. “Meanwhile, geopolitical tensions have impacted global food supply chains, increasing the importance and value in domestic production to ensure food security.”

As for the largest investors in real assets, the $91.9 billion Massachusetts Pension Reserves Investment Management Board Boston, increased its year-over-year allocations to timber by over $100 million and stood at $2.89 billion as of Sept. 30.

Timothy Schlitzer, director of real estate and timberland investments and senior investment officer at Mass. PRIM said in an email that it began investing in timberland in 2002. He added that the forestry industry is one of the oldest in the United States and provides key inputs into the U.S. economy, the most important being housing.

“We have long believed in timberland’s given attributes as an asset class, such as low correlation with other asset classes, inflation hedging, and the ability to ‘store on the stump’ while benefiting from biological growth. Finally, it is a renewable resource which sequesters significant amounts of carbon,” he said.

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