A R3-billion farmland investment fund is set to be launched by two South African asset management firms, Futuregrowth Asset Management and UFF Asset Management.

The fund will be known as the Futuregrowth Agri-Fund and the plan is to attract institutional investors that will invest in South African farms. The result of this is likely to be a major boost to the agricultural sector in South Africa.

"Typically, the fund will purchase a farm, retain the workforce and appoint a professional operator with a strong marketing and distribution network," Erwin Bouland, Investment Manager at UFF Asset Management said in a statement.

"In addition, the fund has a strong socially responsible component. Benefits to farm workers and the broader rural community include employment, skills transfer, healthcare, education, access to services and housing," Futuregrowth Fund Manager, James Howard said.

Reported by Reuters