Farmland generates attractive returns without the risk and volatility of debt

MCSI recently published their quarterly “Global Quarterly Infrastructure Asset Index” comparing the returns generated by both listed and private infrastructure classes with other asset classes such as bonds, real estate and equities.

The report also provided debt ratios for the components of the private infrastructure index.  Using this information and some conservative assumptions for the debt ratios typical of the other asset classes, we were able to reverse engineer the unlevered returns of these asset classes and compare them to the unlevered returns generated by Bonnefield Canadian Farmland LP I and LP II over the same time periods.

The results (shown in the following chart) demonstrate that Canadian farmland is capable of generating superior returns without the risk and extra volatility that comes with leveraging your investment with debt.