JPT Capital, a fund manager for private investors and institutions, has launched a new fund that invests in wheat farming in Australia.

The JPT Capital Agrifund is an asset-backed fund investing in the production of wheat as well as the underlying land through the acquisition of commercial farm holdings, aiming to deliver average annual income returns of 9.25 per cent.

The logic behind the new vehicle is said to be the increase in wheat prices by more than 50 per cent in 2010, affected by conditions including climate, harvest failures and a ban on wheat exports from Russia.

The demand for wheat is expected to continue, driven by changing dietary trends - notably in the Association of Southeast Asian Nations - which are increasingly adopting a wheat-based diet, said the firm.