AgCAP to launch dairy vehicle after reaping A$180m from debut fund sale

The fund manager has exited the last of 17 properties held by SAF, a fund owned by a group of Australian supers.

AgCAP has completed the sale of the Sustainable Agriculture Fund’s portfolio, collecting A$180 million ($134 million; €117 million) through a process started in March.

The last lot of properties to change hands was SAF’s Tasmanian livestock farms, sold to an undisclosed buyer. This follows the firm’s exit of a 6,800-hectare beef operation on King Island to TRT Pastoral Group for $45 million two weeks ago.

The eight-year-old SAF, whose owners include Australian Catholic Super, Mine Wealth and Wellbeing, the University of Melbourne, Christian Super and AMP Capital, was AgCAP’s debut fund. Martin Newnham, chief executive, said AgCAP was now “excited about the prospects of dairy,” and “currently assessing suitable structures for potential investors.”

“Australian dairy farmers are globally competitive, produce high-quality, safe products with high brand recognition in domestic and overseas markets,” Newnham noted.

The firm itself was more specific, stating that the SAF exit “paved the way for a second investment vehicle,” with a “dairy investment program” expected to be available to “institutional and sophisticated” investors in early 2018.

Chunky sales

The SAF portfolio contained 17 properties, spread across 27,000 hectares and five aggregations. The most significant transaction was the sale of 10 farms, in three Australian regions, to a group of investors including TIAA-CREF.

“In less than 10 months, we managed 100 property inspections and multiple complex negotiations,” Newnham said.

The firm reaped the amount it was aiming for – A$180 million – corresponding to the aggregate valuation of the portfolio. Combined with the SAF’s three-year annualized returns of 9 percent after fees and tax, the exit is expected to deliver about A$200 million back to investors over the life of the investment.