Earlier this week, we announced the Wellcome Trust had acquired The Co-op Group’s farms business. So what does the Trust want with the largest lowland farming business in the UK, and what does this mean for the 16,000ha of land, the 15 farms and other properties we now own?
The Trust is the second highest spending charitable foundation in the world, dedicated to achieving improvements in human and animal Health. The Wellcome Trust does not take donations: we generate everything we give away from our investment portfolio. This portfolio is invested in globally diversified holdings, which are managed to provide the return that supports our giving. While the Trust has until now held only a small rural property exposure, we have for some time looked to increase this. As a long-term investor, we have waited for the right thing to come along.
”Enhanced by the Trust, Farmcare will resonate with food businesses”
Farmcare is the right thing. The scale of its business, combined with the quality of the land, the management, the customers and the potential for growth persuaded us this would prove a sound long-term investment. We have therefore purchased the whole business as a going concern, including a transfer of all the employees, and we will now build upon the platform that had been established by the Co-op over the last 100 years.
As a long-term investor, the Wellcome Trust recognises that rural property benefits from consistent and progressive investment through good times and bad. We will therefore provide the support and resource that Farmcare needs to grow, to the benefit of employees, tenants, partners, customers and local communities.
Not all agri-businesses are so fortunate. We believe a combination of long-term financial commitment, good land and business management, operational efficiencies, strong innovation, and the adoption of best practices and accreditations will all provide substantial benefit to customers. We also think customers will value a business that is financially stable, and that helps to support the Trust’s important charitable mission.
Consumers place increasing importance on the origins of food. We believe Farmcare’s qualities, enhanced by the Trust’s humanitarian purpose, will create a proposition that resonates with food businesses. Products will come from high-quality systems with supply chain transparency. Consumers will want to buy them.
At a time when there is so much uncertainty in the world, the need for good food as a basic requirement for human life does not diminish, but the standards required evolve. There is an increasing need for complete transparency in the supply chain, for the highest environmental and responsible stewardship, and for businesses of scale to deliver these things.
The Trust’s purchase of Farmcare might surprise some, but as a charitable foundation with a mission to sustain human life, and a track record as a long-term investor that values responsible stewardship over short-term profits, we fully intend Farmcare to become the leading lowland farming business in the UK.
Peter Pereira Gray is MD of the Wellcome Trust investment arm