Packhorse Pastoral Company has added a second property to the portfolio of its inaugural pooled fund, expanding into New South Wales with the acquisition of the 8,654ha Ottley Station.
Ottley, located 54 km north of Inverell in the state’s north, comprises three individual farms, which Packhorse said would provide flexibility to its cattle agistment customers in either breeding or background operations.
Geoff Murrell, chief executive of Packhorse’s parent company Packhorse Investments Australia, said that Ottley was attractive because it provided geographical diversification for the portfolio and represented “a reliable winter rainfall asset”.
“It has beautiful black basalt soils that lend themselves well to our regenerative farming practices,” he said. “There is a great opportunity for us here to intervene in the native pastures and introduce legumes and other grass species that will increase soil health.”
The other property owned by the fund is its seed asset, the 8,360ha aggregation Stuart’s Creek in Queensland.
“There is also around 1,200ha of cropping country and we’ll put half of that into pasture straight away – so the byproduct is that there is a great carbon sequestration opportunity here, with great upside potential on access to Australian Carbon Credit Units, in addition to the uplift in carrying capacity [we would expect to see] from regenerative practices.”
Packhorse Pastoral Company has ambitions to raise as much as A$1.5 billion ($1.1 billion; €946 million) in total for its open-end fund over the next five years, with a target of A$300 million by the middle of 2022. It then intends to deploy that initial raise by April 2023, before investing another A$500 million in total by mid-2025 following further raises.
The fund held a first close on A$65 million in July 2021 and subsequently launched a further raise of A$50 million.
The firm’s chairman Tim Samway previously told Agri Investor that the fund’s thesis was “Australian cattle land for Australian investors”, but Murrell said conversations had been held with some overseas investors about potential investments, although this would be structured to ensure the fund itself remains classed as ‘Australian’.
“We are definitely going to stay a domestic fund because we don’t want to be challenged by any Foreign Investment Review Board implications,” he said. “If we did decide to bring overseas money in, it would be at a rate that allows us to operate as an Australian fund.
“But the reality is, to get to 2 million ha of assets under management in the next five to 10 years, we probably will have to accept that some of that is going to be overseas investment.”
Samway said in 2021 that this could take the form of separately managed accounts investing alongside the Australian fund: “Eventually we will look offshore, but it won’t be into the Packhorse Pastoral Company fund – it will be more of a separately managed account for offshore investors, who might like to come in and buy a whole property where we will manage it for them. Packhorse is all about Australian land for Australian investors and we’re very focused on that.”
Murrell said that Packhorse Investments Australia had reached A$340 million of total assets under management.
The firm’s additional AUM beyond the pooled fund comes from separately managed accounts, including a portfolio of properties managed for Capital Airport Group, the operator of Canberra Airport, owned by Australian businessman Terry Snow.
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