PSP purchases Australian vineyard through Blue Sky partnership

The Canadian pension made the investment through its strategic tie-up with the embattled fund manager, securing the asset from a Singaporean vendor on a sale-and-leaseback deal.

Canadian pension fund PSP has purchased an Australian vineyard near Mildura in Victoria’s Sunraysia region through its strategic partnership with Blue Sky Alternative Investment, as the embattled fund manager continues to strike deals in the midst of its restructuring process.

Fresh Country Farms Australia No.2 purchased the Millewa Vineyard for approximately A$16 million ($11.4 million; €9.9 million), according to Colliers International, which ran the sale.

Fresh Country Farms is ultimately owned by the Public Sector Pension Investment Board, Agri Investor understands, with the purchase made through the PSP-Blue Sky partnership that was announced in December 2017.

The partnership aimed to deploy capital over a “multi-year period”, an announcement to the Australian stock market said at the time. Blue Sky had not responded to a request for comment at the time of publication.

Millewa Vineyard comes with about 370 hectares of established vines, with additional land for development and a water use limit of 2,412 megaliters. No water was included in the sale.

Fresh Country Farms has entered into a long-term lease with an unnamed “prominent” Australian wine company, Colliers said.

Colliers agent Tim Altschwager said that the price paid per hectare was below vineyard establishment cost but represented a new benchmark for the Sunraysia region.

“Since purchasing the property from the receiver and manager of Great Southern in 2011, the vendor had extensively restored the vines to full capacity, and now produces approximately 10,000 tons [of grapes].”

The identity of the vendor was not disclosed, but Australian media reports indicated that it was Bright Light Pipeline, whose sole shareholder is Hin Seng Tan of Singapore.

Blue Sky recently announced a A$50 million investment in its business from Oaktree Capital Management via a convertible loan note, months after its share price tumbled following a short-selling attack from US hedge fund Glaucus.

The firm is planning to rebrand and will continue raising capital for agricultural investments, although LPs such as First State Super have indicated a pause on investments until Blue Sky’s reputational issues are solved.