Managers of unlisted agriculture funds made a slow start in capital raising to a year for which they have lofty ambitions - with just one fund closing to new cash, even amid a boom in the private capital industry overall.
Of 17 funds in the natural resources sector closed in the January-to-March period, raising $25.1bn, just one was focused on investing in farm assets, according to Preqin, the data group for alternative assets.
The performance followed a mixed record in 2016 when, although the number of unlisted ag investment funds closed rose by three to 13, the total capital raised, at $2.8bn, dropped more than 40% year on year.
And the soft start to 2017 contrasts with a big appetite among private capital investment managers for cash, with 49 funds in the agriculture market targeting $12.2bn of cash as of this week.
That is more than the sector has raised in the three years to 2016 combined.
'Ever-larger amounts of capital'
However, ag funds' quest for cash comes at a time of mounting interest in the overall private capital industry, which is attracting "ever-larger amounts" of investment, Preqin said.
While calendar years typically start on a weak note for cash raising, "as many funds will look to close at the end of the preceding year... this does not seem to be the case in 2017".
The group estimated at $156bn, and perhaps 10% more, capital attracted in the January-to-March period - a figure approaching the record for a first quarter of $170bn, achieved in 2008 before the start of the world economic crisis.
"Private capital remains an important element of institutional investment portfolios," with private equity and infrastructure segments seeing particularly strong starts to 2017 for fund raising.
Too much of a good thing
In fact, the interest is so much that fund managers are struggling to invest all the cash raised without paying inflated prices for assets which would cut prospects for investment returns.
"Continued momentum in the fundraising market is becoming a source of increasing concern for fund managers and investors alike", Preqin said.
The record level of uninvested capital to deploy "means that competition among fund managers for the best deal opportunities is fierce, and consequent upwards pressure on asset pricing is calling into question the ability of firms to sustain their recent high level of returns".
Agriculture uptick?
Tom Carr, head of real assets products at Preqin, signalled the potential for farm funds to benefit from investor interest in private capital.
In natural resources overall, the $25.1bn raised by funds in the January-to-March period, double the sum a year before, showed that "there is clearly an appetite among investors" for the sector.
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