Packhorse Pastoral Company has added a third property to its portfolio and returned to the market to raise another A$62 million ($44.9 million; €42.3 million) for its open-end fund to facilitate the purchase of two further assets.
The deal takes Packhorse’s assets under management past the A$100 million mark for the first time, less than 12 months since the company launched in mid-2021 with a pledge that it would offer “Australian land for Australian investors.”
The latest acquisition is the Moolan Downs Aggregation, located in the Western Downs region of Queensland, approximately 200km south-east of Roma. It comprises four properties – Moolan Downs, Cressy, Allambee and Old Southwood – three of which are Australian Certified Organic and US National Organic Program-certified for cattle.
The firm also opened its next round of fundraising on May 3, with a target of A$62 million to fund the purchase of two properties in New South Wales, located in the Coonamble and Inverell regions.
Packhorse most recently bought the 8,654ha Ottley Station in January, after launching with its seed asset, the 8,360ha aggregation Stuart’s Creek in Queensland.
Chairman Tim Samway, who is also chair of equities fund manager Hyperion Asset Management, told Agri Investor that the organic certification associated with Moolan Downs made it particularly attractive.
“We can get 90 percent of the asset into a carbon sequestration project right away, which helps us get that aspect of the operation going quickly. By moving quickly too, we can address some of the concerns people have about whether these types of [carbon farming] projects are real,” he said, referring to recent criticism over the issuance of some types of Australian carbon credit units.
Packhorse is working with Carbon Link, an independent provider of soil carbon measurement and management services, to monitor progress on its assets, and Samway has said that carbon credits, while not included in advertised return targets, are likely to add significant upside value to the fund’s financial performance.
“We believe that there are very few properties changing hands in Australia that fully consider the future potential returns from carbon sequestration,” Samway said, despite continued findings that Australian farmland is transacting at record high prices.
Samway confirmed that Packhorse now has one US-based investor in its fund and that it was open to further commitments from foreign investors as it grows.
“We are primarily targeting Australian investors – but we have a job to do here, and if that requires capital from the US, Canada or Europe to achieve it, so be it,” he said.
Samway previously told Agri Investor that any foreign capital commitments would be accepted at a rate that would still allow the fund to be classified as Australian for foreign investment screening purposes.
Packhorse Pastoral Company has ambitions to raise as much as A$1.5 billion 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.
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