November 21, 2019

By Lynda Kiernan

Australia’s AAM Investment Group announced the launch of the AAM Diversified Agriculture Fund with a goal of raising A$60 million (US$40.8 million). 

This is the fourth agricultural fund for the Brisbane-based investor, which manages:

~ Southern Cross Poultry Fund: a holder of a large-scale poultry farming infrastructure facility in South Australia producing more than 10 million chickens per year.

~ Pastoral Development Trust: holder of the 178,870-hectare Legune Station, a large-scale cattle station in the Northern Territory with carrying capacity of 33,034 head, a 35,100 megaliter dam (the largest privately-held dam in the country), and access to an additional 106,400 hectares of licensed productive land.

~And the Sustainable Softwood Trust: holder of a stand-alone softwood saw milling facility in New South Wales processing 92,000m3 of raw material per year, with development approval for 210,000m3.

Combined, these three funds account for A$172 million (US$116.8 million) in assets under management. 

The AAM Diversified Agriculture Fund is expecting a close of A$60 million by the end of this year for a closed-end investment trust. The fund’s eventual goal is to build out a portfolio of large-scale poultry infrastructure assets, mixed livestock, and cropping assets.

Initial plans for seed capital from the AAM Diversified Agriculture Fund will be to acquire a minority stake in AAM’s aforementioned Southern Cross Poultry Fund, enabling for upgrades and expansions that will double its yearly output. 

Secondary plans are for the full acquisition of three mixed farming operations in New South Wales engaged in irrigated crop production, dryland crop production, and livestock production.

After the turn of the year, the fund intends to undertake further fundraising to support the acquisition of complementary premium agricultural assets that will be a balance of income-style and strategic investments that will serve to diversify the existing portfolio.

Toward this end, AAM will operate under its guiding principles of strategic investment, development, operational efficiency, and sustainability to generate stable cash distributions, development potential, and capital growth of real assets with a targeted distribution yield of between 7-8 percent, and a total return exceeding 12 percent. After a three-year time period from initial capital commitments, the fund will integrate a risk mitigation mandate by limiting its exposure to less than 40 percent for any given commodity.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.