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Hedge funds and investment banks are swapping their Gucci for gumboots as they bet on rising food prices by buying farms.
Billions of dollars are flowing into farmland across the world as investors gorge themselves on vast tracts of Australia, South America and eastern Europe.
“Sell banks, buy cheese,” said Crispin Odey, manager of a London-based hedge fund... His recommendation is being followed by many hedge funds...
Other hedge funds and investment banks are buying farms to give their commodity traders an edge from first-hand information about costs and prices. Ospraie Management, a New York commodity fund, for example, owns farms, while Morgan Stanley’s commodities business has several thousand acres of Ukraine.
Most of the new breed of farm investors believe the world is entering an era of high food prices where farms will once again be profitable, after two decades of being starved of investment.
“It is an unashamed bet on the continuing rise in the price of food stuffs and the rapid recovery of the farming industry,” said one hedge fund manager.