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AgCap’s Sustainable Agriculture Fund up for sale

AgCap has hired CBRE to sell the fund’s assets following a unanimous decision by its foundation investors, which include AustralianSuper and AMP Capital, to exit the fund despite double-digit returns.

After investing A$145 million (A$110.9 million; €103.2 million) in Australia’s agricultural sector since becoming a trustee of the Sustainable Agriculture Fund (SAF) in 2009, AgCap announced on Wednesday that it would be selling the fund’s portfolio.

The decision comes two months after AgCap, the fund’s manager, announced a one-year total return of 10.6 percent after fees for the year ending December 31, 2016.

“The decision to put the assets on the market was a unanimous decision by all investors and will provide an opportunity for all investors to realize the value achieved by the strong investments made on each of the farms to increase productivity, while providing purchasers an opportunity to benefit from the next phase of growth,” AgCap said in a statement.

The fund’s portfolio comprises five aggregations totaling more than 27,000 hectares of land in New South Wales, Victoria’s Western District, King Island and Tasmania. It includes cotton, grain, beef cattle and dairy farms.

“The SAF portfolio was very well-constructed and in recent years delivered our investors steady income returns, capital appreciation and annual distributions,” AgCap chief executive Martin Newnham said. “These are very good assets that still have development potential.”

Property management firm CBRE, which has been hired to handle the sale, said in a separate statement that the portfolio will be offered in a two-stage international expression of interest campaign, by either the sale of the units in the trusts or by a sale of the real properties. According to media reports, the properties are currently valued around A$180 million, though AgCap and the fund’s investors could not be reached for additional comment.

The decision to sell seems at odds with reports last August that AgCap was looking to raise an additional A$220 million to expand the SAF portfolio, when the fund manager announced a A$10 million distribution to SAF investors.

“We have supportive foundation investors that would like to remain and indeed grow their investment in SAF,” Newnham said at the time. However, he added: “There are other investors for their own internal reasons have asked us to test the market.”

SAF investors, AustralianSuper, AMP Capital and Mine Wealth & Wellbeing (previously known as Auscoal Super) declined to comment for this story. Its other investors, including the Catholic Superannuation & Retirement Fund and Christian Super, did not respond to requests for comment. The University of Melbourne Endowment Fund was not immediately available for comment.