Laguna Bay targets A$750m for Aussie agri fund – exclusive

Laguna Bay Pastoral Company aims to raise A$750 million ($530 million; €507 million) for its debut vehicle, a diversified Australian agriculture fund.

The 10-year fund will target institutional investors and is aiming for a first close at the end of June 2015 and a final close by the end of 2015, according to Tim McGavin, chief executive officer. McGavin is now on the road meeting potential investors until the end of January, he told Agri Investor.

Laguna has worked for institutional clients for more than four years on a more direct basis, investing across row crops, permanent crops, dairy, beef cattle and water.

But the firm has now decided to raise a collective investment vehicle as the case for direct investing is breaking down, according to McGavin. Vendors are less generous with their time than they were post-global financial crisis, so investors need to be able to move a bit more quickly in what is an increasingly competitive market place; raising money after finding a deal can take too long, he added.

The fund will focus on making returns from farming operations instead of focusing too much on the land appreciation bet.

McGavin believes there will be a range of exit opportunities, potentially even from fund investors that want to take a more evergreen or longer-term approach to the asset class.

The fund has a A$2.1 billion pipeline across 20 deals, according to the fund’s brochure. There is no target split between permanent crops, row crops and livestock at this stage; any split will depend on market conditions at the time of the investment, said McGavin.