Funds Hunt For Land To Ride Commodity SuperCycle

While Equity Markets globally have taken a tumble, commodities are riding on a SuperCycle. Global money is now chasing direct farmlands in search of alpha. Investment banks and hedge funds are mopping up vast tracts of agricultural land around the world, hoping to ride the so-called "commodities supercycle" that has lifted prices of everyday agricultural commodities such as wheat, rice, soybeans and corn to record highs.

U.S. investment bank Morgan Stanley has bought several thousand hectares of land in Ukraine, Europe's grain basin.Morgan Stanley declined to comment, but industry executives say many other big banks are looking at land. Barclays Capital, the investment bank arm of UK bank Barclays Plc, is actively searching.

Fund manager BlackRock has a hedge fund that invests in agricultural land. International estate agents Knight Frank is setting up one to buy agricultural land in the UK.

"Over the next five years, you will have 2 billion more people eating bread, eating noodles, drinking coffee ... There is no way in this world that the supply side can catch up with the demand side," says Badung Tariono, an Amsterdam-based fund manager for ABN AMRO.