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Black River bets $25m on Aus farmland

Black River Asset Management has invested $25m in Australian farmland in recent days, according to local reports.

US asset manager Black River Asset Management has invested A$30m ($25 million; €21 million) in four grain farms in Queensland, Australia.

The farms produce wheat and sorghum crops and are located about 230 kilometres from Brisbane.

The investment was not made out of the firm’s Food Fund, according to a source close to the matter. And it was unclear whether or not the investment had been made from a collective investment vehicle when Agri Investor went to press.

Black River closed Food Fund I in 2012 on $200 million and is still raising Food Fund II after Illinois Teachers’ Retirement System committed $75 million in July. The pension plan is also committed to Fund I.

Black River, which is a subsidiary of agribusiness multinational Cargill, will employ local farm managers to run the operations, according to local Australian newspaper Stock & Land.

The firm, which is very discreet about its investments, has an established food and agriculture investment strategy. The firm purchased Marwood Farm, a sugar cane producing property, for A$10.5 million in March last year. It also increased its stake in BFB, an Australian agricultural logistics company, to A$47.5 million in June 2013.

In developed markets Black River looks to work with established operators and pursue expansion or efficiency enhancement. In developing markets the firm pursues a more buy-and-lease strategy by identifying credible operators in those regions. The firm is unlikely to invest into US farmland where parent company Cargill already has a huge presence.

Black River declined to comment on the investment.