Paper short abstract:

This paper will focus on south african investment funds operating in the national agricultural sector. Beyond the socio-economic consequences, it will analyze the strategic and political implications of this investment form diffusion.

Paper long abstract:

Currently, literature pays more and more attention to farmland and agriculture real asset investment funds and their increasing integration in agricultural value-chains, but the opacity regarding their operations makes such analysis often difficult. Trying to contribute to a better understanding regarding these aspects, this paper will focus on South African farmland funds focusing on the agricultural sector.

It will firstly characterize broadly these investment funds as, indeed, this category groups a diversity of actors such as mutual funds, pension funds, hedge funds and private equity funds (McNellis, 2009) with different operations and strategies. Secondly, a more in-depth description of certain South African funds will be presented and will include their modus operandi and capital structure (as foreign funds are often outsourced to South Africans management asset companies). Thirdly, the role of Development Finance Institutions (SFI, OPIC, Proparco, IDC) will be assessed, either as direct investors or as financial service providers (OXFAM, 2012; Thomas, 2012). Finally, it will reflect on the implications for the country, as these investment fund are seen as a new vehicle for agricultural and agribusiness development (Daniel, 2012). Beyond the socio-economic consequences, it will analyze the strategic and political implications of this investment form diffusion (process of "financialization", expansion and development of capital, norm diffusion (equity associations - EMPEA, SAVCA), etc.).