Warakirri Asset Management has appointed a new portfolio manager to oversee its Diversified Agriculture Fund as capital raising continues.
Steve Jarrott joins the asset manager from Westchester, the agricultural investment arm of the TIAA-Nuveen Group, where he was Australian portfolio manager. He began his new role this week.
“It’s an opportunity for me to get directly involved on the ground level of a new fund structure with another experienced, well-credentialed, growing business. The chance to take on responsibility for this fund in a leadership role with a real focus on deal activity and building out the portfolio was very attractive to me,” Jarrott told Agri Investor.
Fundraising for the Diversified Agriculture Fund is still ongoing following its launch in May 2019, with commitments secured from cornerstone investors.
Warakirri has approximately A$2 billion ($1.4 billion; €1.2 billion) of funds under management, and is aiming to raise A$100 million for the fund initially, before expanding to around A$300 million over time.
It aims to build a diversified portfolio of assets in the fund in sectors including, but not limited to, table and wine grapes, citrus, nuts, berries, summer and tropical fruits, and agricultural infrastructure. The fund is targeting an internal rate of return of 10-12 percent.
Jarrott said fundraising was still ongoing and progressing well. “The product has been very well received – it’s about executing on some assets now, continuing to run the capital raise alongside that, and building the portfolio out over time,” he said.
When asked about the effect of drought, he said the question “definitely comes up” when talking to investors, but emphasized that a diversified strategy would help to mitigate risks.
“In the higher-value sectors there are some industries where irrigation water is a key factor, but the diversified nature of the opportunities in our pipeline, ranging from assets in Queensland in high rainfall zones through to areas in southern Australia that are not dependent on irrigation, provide plenty of dealflow outside drought-affected areas,” he said.
“The strategy is not completely immune to drought by any means, but there remain good opportunities in our target sectors and this strategy won’t be as heavily influenced as the broadacre cropping space is at the moment, for example.”
Warakirri said the Diversified Agriculture Fund will continue to accept capital commitments with foundation unitholder benefits until the fund’s first asset is acquired.