Headline

With the Kempen SDG Farmland Fund, we invest in farmland transitioned from conventional, input-driven agriculture to a regenerative and nature-aligned farming model.

Traditional farmland management typically focuses on maximising short-term yields, relying on intensive soil cultivation, monocropping and a structural use of synthetic fertilisers, herbicides and pesticides. While this may support high productivity in the short term, it may also contribute to soil depletion, biodiversity loss and increased exposure to climate-related risks.

By contrast, our regenerative approach is based on the principle of restoring and enhancing natural capital, with soil health serving as an important foundation for long-term productivity. Rather than “feeding the plant”, regenerative agriculture focuses on “feeding the soil”, which can support the resilience and functionality of the broader ecosystem.

Key characteristics of our approach include:

-      Reduced or minimal soil disturbance (low/no tillage) to help maintain soil structure and microbial life;

-      Systematic use of cover crops, crop rotation and intercropping to support soil fertility and help reduce disease pressure;

-      Increasing biodiversity on and around the farm through ecological infrastructure (e.g. hedgerows, field margins, pollinator strips);

-      Gradual reduction of synthetic inputs, with a shift towards organic fertilisers, composting and nutrient recycling;

-      Adoption of integrated and precision-based farming practices to improve resource efficiency (water, nutrients, energy).

This may contribute to a farming system that aims to:

-      Support the restoration of soil organic matter and fertility;

-      Improve water retention and climate resilience;

-      Enhance biodiversity and ecosystem services;

-      Reduce emissions and external input dependency;

-      Support long-term, sustainable productivity and land value.

In essence, where traditional farming often optimises for output in a single season, the regenerative model focuses in multi-year resilience, sustainability and risk-adjusted returns.

The regenerative strategy is implemented through a structured transition framework, supported by ongoing monitoring of both practice adoption and sustainability outcomes at asset level.

At acquisition, each asset is assessed for its regenerative potential. In collaboration with farm operators, local partners and sustainability specialists, a farm-specific transition plan is established, defining the relevant agronomic interventions and the corresponding KPIs across key sustainability dimensions such as soil, biodiversity, water and climate.

The transition plan is embedded in day-to-day farm management, aiming to ensure that regenerative practices are incorporated into operational decision-making and adapted to local agronomic conditions.

Implementation and outcomes are monitored throughout the year by farm operators and local partners, supported by tools such as soil sampling, field observations and digital data systems.

Monitoring is focused on a set of tangible indicators, including:

-      Soil organic matter development

-      Reduction in chemical inputs

-      Water usage and efficiency

-      Emissions and energy use

The Fund applies a structured sustainability measurement framework comprising:

-      9 sustainability themes

-      20+ prioritised KPIs

-      250+ monitored indicators per asset 

Farm-level data is collected, standardised and analysed centrally, enabling consistent assessment across geographies, crop types and operating models.

Results are reported through a structured framework designed to support transparency, accountability and external validation.

-      Results are consolidated in annual sustainability reporting aligned with SFDR requirements.

-      Progress against regenerative targets is tracked over time, supporting ongoing assessment and refinement.

-      The framework is intended to support external verification and certification, including standards such as Global G.A.P. and Regenified.

The Kempen SDG Farmland Fund constructs portfolios using a combined top-down allocation framework and bottom-up asset selection process. At the portfolio level, strategic allocation bands are defined across regions, crop types (annual versus permanent) and operational models, creating a structured framework within which investments are made. 

Within this framework, individual assets are selected based on a combination of financial, sustainability and governance criteria. This includes assessing yield potential and land value appreciation, the scope for regenerative transition, and the quality and alignment of local operating partners. The Fund focuses on mid-sized, land-rich farms in developed markets, where farmland represents the primary long-term source of value. 

DiversificationDiversification is a core principle of portfolio construction and is applied across multiple dimensions. Geographically, the portfolio is globally diversified across developed markets, with selective exposure to secondary regions, aiming to reduce exposure to country-specific risks such as policy changes, climate conditions and currency volatility. 

Crop diversification is supported by combining annual crops, such as grains and row crops, with permanent crops, such as orchards and nuts. This mix balances different biological and economic characteristics, as permanent crops typically provide longer-term, less volatile cash flows, while annual crops could offer greater flexibility and responsiveness to market conditions. 

In addition, crops are deliberately matched to local agro-climatic conditions to optimise yield potential and resilience. Examples include selecting crop–region combinations where natural growing conditions are favourable, thereby reducing input intensity and operational risk. 

Further diversification is supported through the use of different operating models, combining own-and-operate structures with buy-and-lease arrangements, with the aim to balance operational control with scalability and risk sharing. 

Overall, the portfolio is constructed with the aim of achieving a high degree of diversification across geographies, crops and operating models, which is intended to help mitigate key farmland-specific risks such as weather variability, crop disease and price volatility, while offering multiple underlying return drivers, including crop income and land value appreciation.

The Kempen SDG Farmland Fund considers farmland investing to present structural long-term opportunities, combined with inherent agricultural risks that are intended to be managed through diversification and active ownership.

On the opportunity side, farmland may provide multiple return drivers, including agricultural income, land value appreciation and ecological value creation. These may be supported by long-term trends such as population growth, increasing food demand and the need to transition to more sustainable agricultural practices. In addition, a significant share of global farmland is degraded, which may create scope to enhance both productivity and value through regenerative farming.

The Fund aims to capture these opportunities by focusing on assets with potential for regenerative transition and by selecting crop–region combinations with strong yield potential, supported by local expertise and active management.

At the same time, farmland investments are exposed to sector-specific risks, including weather variability, climate change, crop disease, yield volatility and fluctuations in agricultural prices. In addition, the private nature of farmland implies limited liquidity. These risks are intended to be mitigated through a multi-layered diversification approach across geographies, crops and operating models, combined with a focus on developed markets and strong local partners.

InvestorsThe strategy may be suited to long-term institutional investors seeking diversification and sustainable return characteristics. The Fund’s Article 9 positioning, focus on measurable ESG outcomes and long investment horizon may be relevant for investors such as pension funds, insurers, foundations and endowments, church and charitable investors that seek to combine financial returns with impact objectives.

The current market environment for farmland is characterised by cost pressure on inputs combined with more subdued crop pricing, creating short-term margin compression while leaving long-term fundamentals comparatively supportive.

From a cost perspective, energy, fertiliser and labour costs tend to adjust more quickly than crop prices, leading to near-term pressure on farm-level margins, particularly in annual cropping systems. This reflects a broader inflationary environment, where input cost inflation may be transmitted faster than revenue adjustments.

On the revenue side, agricultural commodity markets have experienced ample supply and muted demand growth, keeping several crop prices under pressure, while permanent crops may show greater resilience due to tighter supply-demand dynamics. Over time, however, crop prices, land rents and asset values tend to adjust to underlying production costs, with inflation becoming more visible in pricing mechanisms across regions and crop types.

A relevant factor in this context is the Fund’s regenerative farming approach, which is intended to reduce dependency on synthetic fertilisers and other external inputs over time. This may lower sensitivity to input price volatility and may support more stable operating economics relative to conventional farming systems.

The management of current and upcoming challenges is primarily driven by active, asset-level and portfolio-level measures. At farm level, the Fund focuses on tighter cost control, particularly for fertiliser, energy and labour inputs, and stress-tests operating budgets under higher-for-longer inflation scenarios. It also engages with operators on cost sharing, efficiency improvements and the timing of capital expenditure.

At portfolio level, diversification across geographies, crop types and operating models may allow different assets to respond differently to inflation and commodity cycles, thereby reducing reliance on any single outcome. In addition, the combination of own-and-operate and lease structures may provide flexibility to adjust crop mix, input intensity and operational decisions where needed.

Overall, while near-term conditions are characterised by margin pressure and more volatile crop pricing, the Fund maintains a cautiously constructive outlook. Farmland may continue to be viewed as a scarce, productive real asset, with long-term value supported by factors such as land quality, replacement costs and operational resilience rather than short-term price dynamics.

In markets such as the UK and the Netherlands, institutional investors have made more tangible progress in integrating farmland into portfolios as part of broader private markets and real asset allocations. This recognises farmland as a long-duration, income-generating asset with inflation linkage and resilience characteristics, alongside traditional real estate and infrastructure.

A key enabler in these markets has been a greater willingness to engage with the operational dimension of farmland investing. Strategies such as the SDG Farmland Fund combine global diversification across crops and regions with strong local operating partners and active asset management, allowing investors to access both financial returns and sustainability outcomes in a structured way. This includes clearly defined ESG objectives, such as regenerative farming practices and measurable impact metrics at farm level, which are embedded directly into the investment process. 

In addition, there is increasing recognition in these markets that sustainability and return objectives are not mutually exclusive. Farmland is being approached not only as a defensive real asset, but also as a platform for delivering measurable environmental outcomes—such as improvements in soil health, biodiversity and climate resilience—while maintaining a disciplined investment framework to deliver the target return. 

We also recognise that in Germany, the legal and regulatory framework has been a more significant constraint and can limit how the farmland asset class is classified within institutional portfolios. In particular, German investors subject to Solvency I regulation, i.e. institutions such as insurers and pension funds governed by the German Investment Ordinance (Anlageverordnung, AnlV), may effectively face limitations in allocating the product to a suitable regulatory bucket. This creates hurdles and uncertainties to implementation, even where the underlying investment rationale is well understood. As a result, distribution of the Kempen SDG Farmland Fund in Germany was primarily focused on other segments. At the same time, recent adaptations to the AnlV framework in 2025 may contribute to a gradual easing of allocation constraints and improve flexibility in the classification of such investments.

Mobilising more capital into natural capital, and farmland in particular, requires a continued shift from seeing it as a niche or thematic allocation to recognising it as a core component of long-term portfolios. In more mature markets, this transition has already started: farmland is increasingly positioned alongside real estate and infrastructure as a productive real asset with distinct return drivers, inflation sensitivity and diversification benefits. The key is to make that role explicit in strategic asset allocation, so that investors can clearly understand where natural capital sits and why it matters.

A second step is addressing the fundamental questions investors ask before allocating: how returns are generated, what risks are being taken, and how those risks are managed in practice. Natural capital strategies need to demonstrate that they are not only conceptually attractive, but also investable through robust governance, disciplined portfolio construction and clear operational execution. In farmland, this means showing how value is created across yield, land appreciation and active management, while evidencing resilience across cycles and geographies.

Third, the sector needs to continue improving transparency and credibility, particularly on sustainability outcomes. The focus is shifting from intent to evidence—investors increasingly expect consistent reporting frameworks, measurable KPIs and clear links between ecological outcomes and financial performance. This includes demonstrating how factors such as soil health, biodiversity and water management are not only impact metrics, but also drivers of long-term asset quality and returns.

Finally, scaling capital into the sector depends on making natural capital easier to ‘underwrite’ at an institutional level. This includes building larger, diversified platforms, strengthening local operating models and reducing complexity without losing integrity. Natural Capital 3.0 is ultimately about moving from early-stage adoption to institutionalisation: combining impact and returns within a clear governance framework, so that investors can deploy capital with the same confidence as in other private market asset classes.

Download our white paper Natural Capital 3.0: A more exacting standard to learn more about this emerging asset class.

The Kempen SDG Farmland Fund International Feeder (the “Sub-Fund”) is a sub-fund of Kempen Alternative Markets Fund SICAV-RAIF (the “Fund”), domiciled in Luxembourg. Van Lanschot Kempen Investment Management NV is the management company of the Fund. As mentioned in our submission, Van Lanschot Kempen Investment Management NV is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Sub-Fund is registered under the license of the Fund at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Information Document (included with our submission) and the prospectus (available in English). These documents of the Fund are available on the website of Van Lanschot Kempen Investment Management NV (www.vanlanschotkempen.com/investment-management). The information on the website is (partly) available in Dutch and English. The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.