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Farmlandgrab:
The Australian | 3 June 2016
US investors pour cash into $1bn agribusiness fund
by Bridget Carter
Australian agricultural assets remain a major a drawcard for
international investors with a string of mainly US-based investors
funnelling hundreds of millions into a $1 billion fund established by
the Queensland agribusiness investment firm, Laguna Bay Pastoral
Company.
So far offshore institutions have committed $250m to the new venture,
marking the fund’s first close and setting the clock ticking on its
remaining year-long raising period.
Yet while Laguna has succeeded in luring international investors into
the business, investment opportunities in the sector remain a tough sell
to domestic superannuation funds.
The stance has often frustrated players in the industry, given
Australia’s access to Asian markets and its strong record of performance
in product quality, safety and traceability.
But the absence of domestic institutions has opened the window for
offshore funds, with many reaping strong returns from the sector.
According to sources, Laguna will pursue a broad investment mandate for
the new vehicle, enabling it to invest across all agribusiness sectors,
including beef, dairy and almonds — a potential growth market as
Australian producers capitalise on drought concerns in the San Joaquin
Valley in California, where 90 per cent of the world’s supply is
cultivated.
But as many heavyweight investors like Canada’s Pension Plan Investment
Board and CIC have spelt out in the past, Australian agribusiness also
represents an opportunity to hedge against inflation.
In 2014 Laguna, run by Tim McGiven, struck a deal with
Singaporean-listed commodity trader Olam International to purchase and
lease back 12,000 hectares of almond groves in Victoria for more than
$200m...
