May 18, 2021

By Lynda Kiernan, Global AgInvesting Media

A new agricultural investment company has launched in Australia with its eye set toward eventually building a $1 billion portfolio of cattle properties by 2027 that will play a critical role in carbon restoration and addressing climate change. 

Launched by Packhorse, Packhorse Pastoral Company Australia (PPCA) is being chaired by Tim Samway (the chair of Hyperion Asset Management) who has secured cornerstone backing from Terry Snow, the richest person in Canberra and owner of the Canberra Airport, and is being led by CEO Geoff Murrell, the former general manager of Macquarie Bank’s Paraway Pastoral Company.

“Globally, there’s a recognition that our ecosystems are in trouble and that current farming practices are highly detrimental to soil health,” said Murrell.

“Regenerative agricultural methods focus on achieving biodiversity above and below ground, coupled with animal impact to replenish and protect soils.”

The company has a five-year strategy broken down into three stages – 

In its initial stage, PPCA is targeting $300 million ($230 million in equity and $70 million in debt) to be deployed across four to six agricultural properties located in the area west of Coffs Harbor to Bundaberg. These properties will operate mostly under a service delivery model and non-ownership of cattle – meaning the properties will be rejuvenated and leased out to top beef producers for cattle feeding. Through this model the company is aiming to repair the soil with the help of cattle to restore grassland, and by doing so, is targeting an IRR of between 8-10 percent (3-4 percent from yields and 5-6 percent from appreciation).

“We could make a real difference and improve the land at the same time with better ground cover, better biodiversity and higher yields. It’s a virtuous circle,” said Samway. 

The restoration of these assets will not only improve the carbon content of the soil, but will then enable PPCA to sell carbon credit offsets at scale in a market expected to be valued at $8.25 billion by 2027, positioning the company as the world’s leading land steward, restorer, and beef supply chain.

“Increasingly we’re seeing a demand from institutions and wholesale investors for responsible investment products,” said Samway.

“Packhorse’s deep sector knowledge in agri-business operations and asset management along with its vast experience managing some of Australia’s largest pastoral supply chains coupled with its fund-raising ability, makes us well-positioned to build scale and become a significant voice in the preservation of the Australian rural landscape.”

Packhorse has been in operation since 2014, and has amassed a portfolio of agricultural properties totaling about 56,000 hectares, and manages $200 million in private holdings – PPCA is the company’s first launch into a public strategy.

The cornerstone capital provided by Terry Snow has enabled PPCA to make its first acquisition – the purchase of Stuart Creek, a 8,360-hectare Hereford cattle stud located outside of Roma for $30 million. 

Samway noted that there is strong interest in PPCA from wealthy individuals (minimum investment is $100,000) and institutions (minimum investment is $10 million), saying, “Increasingly we’re seeing a demand from institutions and wholesale investors for responsible investment products.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.