The size of the minority stake, its split between the two investors, and its value have not been disclosed, but Agri Investor understands it will give the investors at least one seat on Gunn Agri Partners’ board and influence over the asset manager’s strategy in future.
In a statement, CDPQ and CEFC said the investment in Gunn Agri itself would “help shape future sustainable agriculture and natural capital strategies, catalyzing the decarbonization of Gunn Agri’s extensive existing portfolio.”
Alongside the minority stake, CEFC and CDPQ announced that they were creating a new sustainable agriculture platform, dubbed Wilga Farming, with A$200 million ($136 million; €124 million) of capital. The deals represent CDPQ’s first investment in Australian agriculture.
Wilga Farming will be managed by Gunn Agri Partners and CDPQ will contribute A$150 million to the platform, with CEFC putting in the remaining A$50 million.
The platform has secured its first asset, The Glen, a 1,200ha property near Delungra in northern New South Wales. In a statement, the firms said emissions from the asset would be lowered by reducing the use of synthetic fertilizer, improving landscape function to slow overland water flows, and implementing grazing management and soil carbon improvement measures.
The platform “aims to fast-track the uptake of low-emissions technologies, carbon sequestration on agricultural land and measures to improve climate adaptability to make farming more resilient,” the firms said in a statement.
CEFC head of natural capital Heechung Sung said the involvement of CDPQ was a “welcome addition to the Australian market” that could demonstrate the potential for institutional capital to decarbonize agriculture.
CDPQ executive vice-president and head of infrastructure Emmanuel Jaclot said the investment affirmed its “commitment to investing alongside organizations that are truly moving the needle on sustainability in the agricultural sector by contributing to its decarbonization.”
Gunn Agri Partners founding chair Bill Gunn said: “The DNA of our business is to be completely investor-aligned, to capture timely opportunities and to develop and operate assets with sustainability as a fundamental part of our management. I am very proud that is exactly what we have delivered on.
“Gunn Agri Partners was established in 2013 and has over 2.5 million acres of grazing pastures and forests in northern Australia, and is on track to deliver target returns. Our second strategy focused on row crops is fully deployed and has recorded above-target returns to date. Our permanent crop strategy is fully deployed and has received follow-on investments.”
The establishment of Wilga Farming was backed by the Australian federal government, which approves funding for the CEFC. Minister for climate change and energy Chris Bowen said: “Agriculture is responsible for over 15 percent of Australia’s greenhouse gas emissions, and by supporting initiatives like this we’re investing in solutions to drive up farm productivity and profits and drive down emissions at the same time.”
The CEFC is also an investor in the Gunn Agri Transforming Farming Platform, to which it committed A$50 million in 2021. The open-end SDG Kempen Farmland Fund also committed A$50 million to take the TFP to A$100 million.