QIC set to launch A$500m natural capital fund – exclusive

QIC plans to raise at least A$500 million for the Queensland Natural Capital Fund, its first commingled agriculture and natural capital fund.

Queensland-based asset manager QIC is exploring the launch of its first natural capital fund, with a fundraising target of at least A$500 million ($340 million; €341 million).

The vehicle will be called the Queensland Natural Capital Fund and will be structured as a 15-year closed-end vehicle, with an investment period of seven years. It is set to target a net IRR of 8 percent to 10 percent.

Agri Investor understands that QIC has not yet commenced formal fundraising for the vehicle, which would be its first commingled fund in the agriculture and natural capital sectors, but has already secured a commitment from one unidentified investor.

The Queensland Natural Capital Fund will look to make investments in timberland and other agricultural assets, including pastoral land, with carbon and biodiversity credits a potential source of income.

The asset manager’s most significant foray into agriculture to date is its acquisition of a controlling stake in Northern Australian Pastoral Company. QIC purchased a 79 percent stake in that business in 2016 on behalf of two investors: Queensland’s Long Term Asset Advisory Board and the UK’s Pension Protection Fund. At the time of the acquisition, the Foster family retained a 21 percent minority stake.

NAPCo was founded in 1877 and is one of Australia’s most significant cattle enterprises. It operates 13 cattle stations across the Northern Territory and Queensland, covering more than 6 million ha of land, and owns Wainui Feedlot – also home to a 5,000-ha dryland and irrigated farming enterprise – as well as a supply depot at Mount Isa.

QIC’s fundraising will be led by Tom Murphy, who is head of agriculture and natural capital at the asset manager, having joined in 2018 after a spell at Blue Sky Alternative Investments as head of institutional distribution.

QIC declined to comment on the fundraising or its plans to expand its natural capital strategy.

The fund launch represents the latest attempt by asset managers to raise capital for the nascent asset class.

Pollination joined forces with HSBC in 2020 to launch Climate Asset Management, an asset manager dedicated to natural capital investments, while in 2021 investment giant Nuveen combined its farmland manager Westchester Group Investment Management with forestry asset manager GreenWood Resources to form a combined unit known as Nuveen Natural Capital.