New Zealand's Farm Venture launches $109m agri fund

The fund, known as New Zealand Pastoral Investments, will be listed on the Syndex Exchange, a local bourse focused on proportionally-owned assets. It is targeting a first close of at least NZ$25 million that will allow for the acquisition of three dairy farms and an unspecified stake in domestic dairy giant Fonterra. Other early investments are planned to include beef, poultry, and horticulture assets.

According to a release, the fund is projected to achieve a return rate of 10% per year, with 6% coming from operations after management fees and 4% coming from productivity improvements and inflation. NZ Pasture Management, a subsidiary of Farm Venture, will act as GP.

The fundraise is targeted primarily at New Zealand investors, with international participation to be initially capped at 30%. Backers are expected to include institutional investors, high net worth individuals and private equity funds.

“Internationally we see investment portfolios with much higher weightings in alternative investments and particularly agricultural assets,” Tim Barrett, managing director of Farm Venture, said in a statement.

New Zealand agriculture has attracted increased attention from institutional investors in recent years on the back of growing Asian demand for food exports with higher quality and safety standards. Recent private equity activity in this space includes the acquisition of egg producer Mainland Poultry by Navis Capital Partners.

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