May 23, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Australian-owned, mission-driven ag investor, developer, and manager GO.FARM announced it has launched a A$300 million (US$198.4 million) capital raise, part of which is the additional launch of the Responsible Agriculture Fund to elevate natural capital assets to their highest value and best use. 

The fund launch is happening at an optimum time for investors looking to gain access to Australian agriculture and to capitalize on the advantages offered by the asset class, according to Danny Thomas, senior director, LAWD, and one of Australia’s leading agribusiness transaction advisors, who stated, “Australian agriculture is primed for investment, with best-in-class research, technology, and farming  practices producing high-quality, ethically produced food for global markets.”

“However, farm managers and operators also need to know what they’re doing. Good farming operators draw on specialist knowledge and expertise to identify assets with great potential for transformation to  highest and best use, investing in technologies, infrastructure and commodities that will drive highest  value returns.” 

“GO.FARM is a business that does this as well as anyone, and is ready to drive the growth our sector is capable of achieving.”

With more than a decade of experience in agricultural development and climate-smart farming, GO.FARM is one of the country’s largest producers of almonds, grains, oilseeds, pulses, citrus, and wine grapes with 88,000 hectares (217,453 acres) and 94,000 megaliters of water across New South Wales, Victoria, and Tasmania. 

“We’re focused on excellence in execution,”  said Liam Lenaghan, founder and managing director, GO.FARM. “From team capacity and capability to acquisition behavior and operational performance, we have dedicated agricultural specialists in all facets of the business.” 

“We’ve got the track record to support taking a fund to market and we’re thrilled to be finally bringing this offering to investors.”

Ag is the fastest growing sector in the Australian economy, and is second only to mining in its contribution to Australia’s GDP. And while the National Farmers’ Federation made an ambitious announcement that it foresaw the potential for the country’s ag sector to achieve the benchmark of A$100 billion (US$66 billion) in farm gate output by 2030, this achievement will necessitate approximately A$400 billion (US$265 billion) of fresh investment to drive a step change in productivity. 

For its part, GO.FARM plans to invest a total of A$600 million (US$397 million) (in equity and debt) into acquiring and transforming geographically diversified agricultural assets to deliver strong risk-adjusted returns to investors. 

The fund is anticipating a gross asset level IRR of 15-19 percent with an aim to generate a net fund IRR of 12-15 percent per annum, consistent with GO.FARM’s track record of realized and unrealized returns. 

Lenaghan stated that the Responsible Agriculture Fund will provide dynamic options for the investment community to capture the best opportunities available in the investment class.

But despite farmland generating a CAGR of 8.5 percent over the past 20 years, and water entitlements a CAGR of 6.7 percent over 15 years, Lenaghan noted that “simply buying the market is not the path to real agricultural investment success or delivering positive impact.”

“That requires deep domain expertise and a willingness to be deliberate in asset transformation to drive a step change in productivity, sustainable earnings, and delivering positive impact within regional and rural communities,” said Lenaghan.

“The feedback we’ve had from investors is that they’d like fund exposure where they can get four or five of our best ideas in one investment, giving them geographical spread across a number of climate zones, water sources, and crop types. This is what the Responsible Agriculture Fund will deliver.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.