Dive Brief
- The University of Illinois, one of a handful of universities with significant farmland holdings, is hoping good relations with area farmers will lead to more land gifts. Chief Investment Officer Ellen Ellison said she is constantly looking for "new ways to skin a cat" and bring in revenue. Ellison wants to make farmland investments 10% of the school’s $1.8 billion endowment portfolio, reports Bloomberg Businessweek.
- Farmland has been a sound investment for some universities, earning high returns, even in down economic times. In addition to the land itself, the institution is focusing on agriculture-related private equity.
- Despite the risk of investing in farmland, it has provided huge returns for an institution located in a state with constant budget insecurity. When the institution's total investments were experiencing a 20% loss during the financial downturn in 2009, farmland was up 10%, and the land holdings have brought the institution a 10.2% annual return over the past decade.
Dive Insight
In face of decreasing traditional funds, lower enrollment, and a tough economy, colleges must be entrepreneurial to amplify their financial standing. The University of Illinois’ investment strategy, tied to farming assets, is a perfect example of how a college can creatively leverage its strengths to earn more capital and boost its brand.
However, it's important for leaders to assess what works best for their institutions, based on the expertise located therein, and not just rush to make decisions based on what others are doing. Officials at the University of Nebraska Foundation, according to the Bloomberg Businessweek piece, have declined to invest heavily in farmland, because they lack the expertise to manage it. Whether it’s in human resources, expertise, or the community, savvy higher ed leaders are taking stock of their assets and strategizing on how to expand and build.