The Real Asset Revival: Why Many Investors Are Reallocating Toward Tangible Value

As inflation risks persist and interest rates remain uncertain, many institutional and accredited investors are revisiting portfolio allocations and increasing exposure to alternatives as a way to preserve capital and diversify. This evolving approach has contributed to growing interest in real assets—tangible investments such as farmland, infrastructure, and private real estate.

Unlike traditional financial assets, real assets derive value from their physical utility and long-term demand fundamentals. In today’s environment, they can offer a combination of income generation, inflation resistance, and low correlation to public markets—characteristics that are contributing to a broader rethinking of long-term portfolio construction.

Real Assets: Building Durable Value for the Long Term

Real assets—such as farmland, infrastructure, and private real estate—derive their value from physical utility and long-term demand, rather than from market sentiment or earnings multiples. This characteristic distinguishes them from traditional financial instruments, which tend to be more sensitive to economic cycles and shifts in investor sentiment.

Historically, real assets have offered investors a combination of income generation, inflation mitigation, and relative stability–particularly during periods of macroeconomic uncertainty. Their performance is typically linked to essential services such as food production, housing, and transportation—sectors with inelastic, persistent demand.

While no asset is entirely immune to volatility, real assets have demonstrated resilience across inflationary periods, rising rate environments, and broader market drawdowns. Farmland in particular has shown a long-term track record of delivering income and appreciation, with volatility historically lower than equities and commercial real estate, as illustrated in the graph below.

As macroeconomic conditions remain fluid, many investors are rebalancing toward assets with intrinsic value, low correlation to traditional markets, and a history of preserving capital across cycles. Real assets are increasingly seen not as alternatives, but as core components of a modern, resilient portfolio.

Navigating Yield Constraints and Volatility with Real Assets

What distinguishes many real assets is their ability to generate both current income and long-term capital appreciation. Farmland, for instance, produces income through lease payments or crop-share agreements while also benefiting from gradual land value appreciation^[1]. Infrastructure and private real estate exhibit similar characteristics, often with cash flows linked to inflation-indexed contracts or long-term usage agreements.

In an environment where fixed income yields remain anemic and public equity markets are marked by volatility, this dual-return potential makes real assets an increasingly attractive consideration. It allows investors to target long-term capital appreciation while maintaining exposure to income-generating assets—positioning real assets as a strategic component in modern portfolio construction.

A Strategic Allocation, Not a Thematic Bet

The shift toward real assets reflects more than a temporary hedge—it represents a broader evolution in portfolio construction. Pension funds, endowments, and family offices have steadily increased their allocations to private real assets over the past decade, drawn by their potential for income generation, capital preservation, and low correlation to public markets.

In recent years, this trend has accelerated as institutional investors reassess the limitations of the traditional 60/40 framework and pursue greater portfolio resilience. For individual accredited investors, access to real assets is also becoming more streamlined—enabling participation in the same structural characteristics that have long benefited large, long-term allocators

Farmland’s Distinct Role in Real Asset Portfolios

Among real assets, farmland occupies a particularly differentiated position. It is essential, finite, and directly tied to one of the most inelastic global demand drivers: food. Unlike infrastructure or real estate, farmland does not depreciate in utility over time—and with responsible stewardship, its productive capacity can improve.

Farmland tends to exhibit relatively low cyclicality, with historical performance marked by low volatility and strong downside resilience across market cycles. While all real assets carry unique risk factors, farmland’s connection to essential, demand-driven goods like food contributes to its defensiveness in uncertain environments.

For long-term investors seeking a defensive, income-generating, and inflation-sensitive real asset, farmland offers a compelling risk-return profile—and a durable role in strategic portfolio construction.

Implications for Long-Term Allocation

Renewed interest in real assets reflects a broader structural evolution in portfolio construction—not merely a tactical response to near-term volatility. As uncertainty around inflation, interest rates, and public market dynamics persists, investors are reassessing the role of tangible assets in achieving long-term objectives.

In this context, real assets such as farmland are drawing increasing attention for their potential to generate income, dampen portfolio volatility, and provide exposure to essential, demand-driven segments of the economy.