Fundraising

Kilter Rural secures $50m mandate from US institutional investor

Kilter Rural CEO Cullen Gunn says the mandate proves that GPs with low-carbon investment strategies ‘can gain significant investor support.’

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Kilter Rural has won a major new investment mandate from a US institutional investor worth $50 million.

The mandate will see the fund manager invest the capital into sustainable agriculture and water assets in Australia on behalf of the investor. Kilter Rural said it could not disclose the identity of the LP.

In a statement, Kilter Rural CEO Cullen Gunn framed the commitment as part of investors’ increasing focus on natural capital investments amid growing global pressure to ramp up climate change action ahead of the COP26 Summit in Glasgow which runs between October 31 and November 12.

“The growing support Kilter Rural is achieving from the investment community both here and internationally, illustrates that firms that are part of the transition to a low carbon future, as we aspire to be, can gain significant investor support, be a part of the solution and still make great returns,” he said.

The firm also said that it is likely to hit a final close on its Australian Farmlands Fund before the end of 2021 and that it has interest from another investor on committing to an investment mandate. The Australian Financial Review reported that this second mandate, from a local Australian investor, could be worth approximately $30 million.

The Australian Farmlands Fund was launched in 2018 with an initial target of A$500 million ($376 million; €324 million), a figure that was lowered to A$300 million in 2020. It aims to buy under-utilized or mismanaged properties where value can be added, or farms that are seeking additional capital to expand operations.

Kilter Rural manages two other open-ended investment strategies: the Kilter Water Fund, a straight play on water in the southern Murray-Darling Basin, and the Balanced Water Fund, an impact investment vehicle it launched with The Nature Conservancy in 2015.

Kilter Rural and TNC were also jointly awarded a grant of A$500,000 by the Great Barrier Reef Foundation in 2020 to explore the possibility of launching an impact investment vehicle known as the Farmland to Reef Regeneration Fund.