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Craigmore II holds first close

The firm's fund, which only targets New Zealand dairy, has a European pension plan as its cornerstone investor.

New Zealand investment and private equity partnership Craigmore Farming has held a first close for its Craigmore Dairy Partnership II (CDP II) on NZ$75 million ($50.6 million; €46 million).

The firm, which invests in sheep, horticulture, beef and dairy in New Zealand, will make investments in the dairy sector through the fund, which was launched earlier this year.

Craigmore told Agri Investor in September that CDP II, the firm’s third New Zealand investment partnership, will target total equity of NZ$350 million ($224 million; €197 million). Craigmore chairman Nick Tapp told Agri Investor that the firm expects a second close early next year and a final close before the year is out.

“This confirmation of first close allows us to purchase some really good farmland assets early in the new year, and to extend on our capability on the ground,” Tapp also said in a press release.

First close commitments “include a cornerstone investment from a European public sector pension fund and clients from our previous investment offerings,” said Tapp.

The fund has attracted investors from around the world, but Craigmore’s equity partnership model also means that farm managers have an interest in the businesses they run, not within the fund itself but in their own right.

“We seek to capture the best of owner-operator behaviour within a larger entity by encouraging our farm managers to invest alongside institutional investors,” said Tapp. “This creates a high degree of alignment of interest all the way to day-to-day on-farm decision-making.”

Fund II has a semi open-ended structure instead of a typical 10 year fund life, because, Tapp told Agri Investor in August: “We believe quite strongly that investments in farmland [should be] long-term assets and a number of institutions we are talking to are looking at the opportunity to hold high-quality farmland assets for a longer term.”

Craigmore’s previous fund was a NZ$225 million vehicle which closed in October 2014, and is now fully deployed.