Are California vineyards a good investment? Harvard University thinks so; in fact, the University’s famed $32.7 billion endowment fund (the largest of any U.S. University) has made a substantial investment in California vineyards. That info from Harvard Management Company, (HMC) the in-house management firm that oversees the University’s investment strategy in natural resources. The prestigious university spent $10.1 million for more than 7,500 prime vineyard acres in the sunshine state. The investment was recently featured in Wine Spectator’s article titled “Harvard Invests in vineyards on California’s Central Coast.”
The news of the investment in California vineyards by Harvard University is another example of a growing interest in farmland by substantial investment funds. Why? That’s an easy question to answer. U.S. wine exports (90% of which originate in California) are booming. Add to that the fact that US wine exports to China continue to surge as they have for many years, and it’s easy to see why the university chose to invest in grapes.
“If you can get in during the early days before the land prices skyrocket, you’re better able to harvest returns as time passes,” said Michael Fritz of the Farmland Investor Center regarding the timing of Harvard’s move. The Center bills itself as the one-stop source for information that empowers wise market decisions.
Jane L. Mendillo, president and CEO of HMC explained in the organization’s annual report that the purchase reflects the continuation of HMC’s long-established strategy of investing in natural resources, citing impressive historical performance of natural resource holdings. One just needs to examine HMC’s natural resource holdings to see that they have generally performed well in the last ten years; generating an average return of 12.2% annually.
California isn’t the only region upon which Harvard is placing farmland investment bets. The fund also has such investments in New Zealand, Romania, Latvia, Argentina, Brazil, Chile, Ecuador and Panamá,
If you are looking to invest in a luxury home, estate, vineyard or winery in Napa Valley or Sonoma, please call me at 707-738-4820 or email me at [email protected]. You can rest assured your investment will be a good one, considering you will be following the lead of Harvard University by investing in California Wine Country. Please be sure to LIKE me on Facebook so you can stay informed on wine and real estate news!