Australia was the natural choice for the Qatari sovereign wealth fund’s agricultural ambitions, John Corbett, director of Hassad Food Australia, told delegates at Agri Investor’s inaugural Australia Forum in Melbourne this morning. Hassad is the fully-owned subsidiary of Qatari Investment Authority.
Corbett said that they were looking for several factors in an agriculture investment destination: a natural exporter of products – and one which was not likely to close its borders to food export – a strong rule of law, clear foreign ownership regulations, appropriate infrastructure to move produce from farm to port and further, and a population in place with the requisite skills.
“When looking through those prisms, we were very quickly able to knock out other countries and Australia stood out,” he said.
Hassad has now fulfilled its original business plan and is making a second round of investment in the country, a testament to how successful the initial set up was.
Growing demand for beef and the opportunity to develop new assets were the big drivers in Terra Firma’s decision to invest in Australia’s agriculture sector, argued Troy Setter, chief executive of Consolidated Pastoral Company, the private equity firm’s portfolio company.
“Terra Firma likes to invest in asset-backed businesses and essential businesses like food, and investing where they can make a real difference so CPC was a natural pick,” he said. “The reason to get into beef was that the firm had a forward view on global beef supply and demand. Demand is growing in Asia but also in more traditional markets like the US.”
Australia also presented an interesting opportunity in technology, innovation and infrastructure development through investment by state and private players, added Setter.
While Macquarie has investments in Brazil, where you “can almost hear the grass growing” compared to dry parts of Australia, “Australia is the more reliable and predictable jurisdiction to establish and do business with governments and counterparties in a very transparent way. And it is a predictable market for exits,” said Elizabeth O’Leary, head of agriculture at Macquarie Infrastructure and Real Assets.