FG Agri’s integrated fund brings in over A$300m of soft commitments – exclusive

First Guardian Agriculture's Australian Agriculture Fund is now targeting A$800m and will invest across commodities and parts of the value chain.

First Guardian Agriculture (FG Agri), the Australia agri asset manager, has received soft commitments for its Australian Agriculture Fund for over A$300 million, according to chairman David Twine. Early interest has come from China and the US predominantly.

The diversified agriculture fund is targeting A$800 million overall and will invest in beef, sheep, grain and other opportunistic assets such as a dairy, horticulture, life sciences or distressed broad acre, along the value chain. The target has been increased since the fund first appeared in the market targeting A$500 million last year.

“The aim is to build an integrated portfolio of strategically complementary agricultural assets that can operate as an internationally competitive integrated supply chain,” according to an investment memorandum seen by Agri Investor.

Beef will be the fund’s largest component as FG Agri aims to feed the agricultural export markets.

The fund is targeting 12 percent to 18 percent returns at the end of an 8-year term. This includes operating yields of 5 percent, inflation of 4 percent, and gains from asset upgrades and development of between 6 percent and 8 percent.

The deployment period will be two to three years, with five to six years of development and operations.

FG Agri launched formal fundraising for the vehicle at the end of March but first approached investors with the concept last year.

FG Agri’s parent company, First Guardian Group, established a Beijing office October 2014 to focus on the food and agriculture sector. The company also works in advisory, trading and export facilitation.