Aquila nears Aus dairy fund close – exclusive

Aquila Capital, the alternative fund house, is nearing the close of its Australian dairy fund on around $200 million. This is just above its undisclosed internal sales target, according to sources close to the deal.

Aquila’s will be the first private equity dairy fund to close in Australia, according to Agri Investor records.

The fund, which has a hard-cap of $400 million, was launched during the first quarter of the year and was expected to close during the third quarter. Less pressure to deploy capital quickly and requests from investors to keep the fund open longer caused the delay, according to Detlef Schoen, managing partner of farm investments at Aquila.

“As milk prices have pulled back a little there is no immediate pressure to deploy everything short term,” he said. “We are therefore very comfortable with the current environment and will commence with the deployment of initial capital soon, always mindful of our investors’ best interests.”

“Actually the current favourable environment has led to additional investors inquiring if it is possible to keep a door open a little longer,” he added.

The fund manager initially planned to deploy the capital within 18 months of closing to take advantage “time-sensitive” opportunities to buy distressed dairy farms in Australia, upgrade and operate them while the milk price was still low.

Other market participants in the sector expressed surprise that the fund was set to raise as much as $200 million as the debate about the value of Australian dairy over other dairy options, namely New Zealand, has gathered pace in recent weeks.

Other funds in the sector have also received commitments in recent weeks: Swedish pension fund AP1 topped up its commitment to New Zealand dairy private equity fund Southern Pastures last month and New Zealand peer Craigmore Farming Partnership closed on NZ$225 million in September.

Further details about the investor base will be available when the fund officially closes.