BAM to launch global agriculture fund

The fund management firm said it would invest in companies where the majority of earnings were derived from activities relating to agriculture or had the potential to benefit from this theme.

Jonathan Blake will be manage the fund. He said: "With the world’s population growing at around 80 million per year and meat consumption rising sharply as a consequence of rising incomes, particularly in India and China, pressure on food prices is immense.

"In addition to these factors, interest in biofuels is further increasing demand for soft commodities. Limited resources and bottlenecks mean that supply is struggling to keep pace with demand whilst global warming is likely to create additional pressure on supply in the years to come.

"We therefore believe that agricultural investment is emerging as an attractive long-term investment theme that should have a place in all well-diversified investment portfolios."

Blake said investment in agriculture could also act as a hedge against inflation – something of particular concern to pension schemes.

He said: "With the Bank of England predicting that UK inflation could rise towards 4pc this year, and with the US economy heading into recession, investors will be looking to review their exposure to these markets.

"By contrast, the long-term case for companies involved in agribusiness remains attractive in our view, and the sector is likely to provide valuable hedging benefits in an environment of rising inflation."