International Farming Corporation (IFC) is planning an initial $1.5bn (€1.23bn) capital raise for an open-ended US farmland fund, according to an investor.

Washington State Investment Board (WSIB) told IPE Real Assets that it will be seeking approval at a board meeting to invest up to $250m in the IFC Core Farmland Fund.

The $128.8bn pension fund’s investment consultant Callan has recommended the investment.

The Core Farmland Fund intends to buy and lease large-acreage US farmland to large-scale tenants. 

According to WSIB, the fund is expected to yield a net return of 7% to 9%.

Core Farmland Fund will seek to generate current income and modest capital growth over the long term by investing in a combination of row, speciality, and permanent farmland, diversified by region, crop operator, and related assets including irrigation and crop storage.

WSIB’s relationship with IFC dates back to 2014 when the pension fund made a $250m commitment to the US Farming Realty Trust III fund.