MyFarm, the New Zealand-based livestock farm management company, has raised NZ$13.85 million ($12 million; €8.6 million) to invest into two local farms alongside a range of high net worth individual investors.
MyFarm raised NZ$7.25 million to invest into Mirakanui Dairy Limited Partnership and NZ$6.6 million to buy Ngaponga Limited Partnership, a sheep and beef farm.
The company has been arranging syndicate acquisitions of farms for over 20 years and now manages up to 50 farms averaging around 700-800 cows in each. Around 350 investors have shares in the farm syndicates overall, according to Andrew Watters, director of MyFarm.
“Repeat investors probably account for about 50 percent of each syndicate,” Watters told Agri Investor. “The split between farmers investing and financial investors from the city or overseas is now a third to two thirds, although we used to have more farmers investing with us before the global financial crisis.”
Overseas investors usually account for around 25 percent of each syndicate, although this has dropped off a bit recently due to the strength of the New Zealand dollar, he added.
The minimum invested into each syndicate is NZ$250,000, although the company accepted commitments of as low as NZ$20,000 into other deals last year.
The life of each investment is usually between five and seven years, “although we are finding that some last a little longer and are closer to 10 years, but we offer a share sale service to investors that want to get out earlier”, said Watters.
“When we look at properties we can often see some quite large production upside, whether by using fertilisers, improving the water supply, fencing or access tracks,” said Watters.
MyFarm is currently raising capital for Gold Creek Farm Limited Partnership, a Southland dairy farm that it has already acquired.
From its inception in 1992 until June 2012, MyFarm returned 10.78 percent on a mean basis. This compares with 7.27 percent return for the New Zealand stock exchange during the same period, and 4.07 percent for 10-year government bonds.