Roc Partners is set to acquire a 25 percent stake in NZX-listed New Zealand Rural Land Co’s portfolio for NZ$44.2 million ($26.9 million; €24.7 million).
NZRLC owns 14,847ha of rural land across New Zealand, mainly on the South Island.
Last year, NZRLC employed New York adviser Perella Weinberg Partners to find a North American investor to take a 25 percent stake in the portfolio, but the search instead led them to Sydney-headquartered fund manager Roc Partners.
The deal marks the third acquisition for Roc Partners’ open-end Roc Agri+ Infrastructure Fund, which launched in 2021 and now has about A$300 million ($198 million; €182 million) in commitments.
Roc Partners managing partner Brad Mytton told Agri Investor it is also the firm’s first direct agricultural investment in New Zealand.
“We’ve done a lot in New Zealand in private equity over the years, but this is the first in the agricultural space,” he said, adding that it will not be the last.
“We’ve been looking at the New Zealand market for a long time now, and New Zealand’s within the mandate for what we’re doing in Australia, so we’ll continue to cover the market pretty closely.”
Under the deal, NZRLC retains management of the portfolio, while Roc Partners gets one of the four seats on the board of a company established for the partnership.
Roc Partners will look to continue the growth of the portfolio without altering NZLRC’s current strategy, which Mytton said aligns closely with that of Roc Partners.
“It’s a combination of high-quality assets leased to very high-quality counterparties – and really, that’s the mantra for our agri-infrastructure fund. It’s a pretty unique and compelling opportunity to step into a ready-baked, ready-made portfolio.
“We weren’t investing in a black box, something we couldn’t see. We were able to go in and [do] diligence [on] the assets, meet the tenants and conduct our own pseudo-underwriting of the portfolio to make sure we were comfortable with it,” said Mytton.
Some proceeds from the NZ$44.2 million deal will repay NZ$11.8 million owed on a convertible note NZRLC drew down in April 2023 to partially fund a forestry acquisition.
NZRLC co-founder and director Richard Milsom said the deal also frees up capital so the partnership can explore new growth opportunities.
“There’s always a plethora of high-quality assets; it’s just a matter of selecting what you think offers the best risk-adjusted returns in any market cycle.
“What looks attractive at the moment is forestry, carbon, horticulture, dairy, and pastoral.”
NZRLC expects to complete the transaction on February 8.