September 2, 2024

By Gerelyn Terzo, Global AgInvesting Media

Nine months after taking the helm of Impact Ag Partners, CEO Hugh Killen has architected a key partnership, thrusting Australia’s regenerative agriculture industry into the spotlight. Impact Ag Partners, an Australian-owned firm that specializes in agricultural investment and development, and Macdoch Australia, which invests through a foundation that carries its name, have partnered to accelerate investment into regenerative agriculture and ecosystem services.

With the deal, Macdoch Australia builds on its foundational investment in holding company Impact Ag Partners by acquiring a meaningful stake in a new investment vehicle called Impact Ag Australia. As part of the partnership, Macdoch Australia’s 8,000-hectare (19,768 acre) beef cattle operation, dubbed the Wilmot Cattle company, will operate under the umbrella of Impact Ag Australia’s Farm Management division.

Alasdair MacLeod, executive chairman of Macdoch Australia, was named chair of the new entity. MacLeod stated, “Hugh Killen brings deep expertise in leadership, finance and agricultural production at scale — and under his management, I am very confident that Impact Ag Australia is well positioned to deliver for an investor community that is increasingly looking to incorporate natural capital solutions into their portfolio.”

With approximately A$1 billion (US$679.3 million) in AUM, Impact Ag oversees about 620,000 acres under management across Australia and the United States, including mixed farming, livestock, broadacre cropping, permanent tree cropping and natural capital. Through the Impact Ag platform, investors gain exposure to profitable regenerative ag and natural capital development. However, according to Killen, who inherits the role as CEO of Impact Ag Australia, there is still more work to be done on this front.

Killen points to a funding gap amid the transition from conventional global food systems to regenerative ag that amounts to a minimum of US$250 billion annually over a decade, saying, “And as global nature and climate crises escalate, the need for transition in agricultural land management is only becoming more urgent.” Killen graciously took some time to share more about the partnership with GAI News.

1.) GAI News: Congratulations on the formalized partnership! Can you share more about how this relationship deepened and your role in the newly formed company?

Killen: Having taken on the role of CEO for the Australian operation in January 2024, I’m approaching my first full year with the company. However, my journey with Impact Ag Partners started earlier as a director, and I’ve long been a strong advocate for the company’s thesis to drive impact for nature and profit.

Prior to coming on board, our founder Bert Glover was successfully managing the business both in Australia and the U.S. And the company’s track record is evidenced across more than 600,000 acres and 20 farms and ranches globally.

But the U.S. offers a tremendous opportunity to attract investment, deploy capital into nature-positive agriculture, and introduce Australian innovations and farming approaches that aren’t yet widely adopted in that market.

Impact Ag Australia is a new company formed in partnership with Macdoch Australia. But the partnership itself isn’t new. Alasdair MacLeod is something of a founding father for Impact Ag Partners — he came on as a foundational investor, and he’s since been a strong advocate for both the business and the work we do.

So it’s not a new partnership; it’s leveling up an already strong one.

2.) GAI News: Can you explain more on the mechanics of how the new structure will work from an investment perspective?

Killen: We’re an Australian-based company, and our mission is to accelerate investment into regenerative agriculture and ecosystem services. And we’ll do that by unlocking co-investment opportunities and strategic partnerships that give access to Australian real assets as a climate and nature-based solution. Funds, JVs, separately managed accounts: it’s all on the table.

Attracting and deploying capital is at the core of what we do. But Impact Ag Australia also offers regen-ag focused asset management and advisory services, leveraging what we call our ‘Green Box’ solutions to help investors, corporate ag clients and other partners achieve stacked returns from farming and natural capital.

3.) GAI News: You talk about the urgency around the transition to a regenerative ag system in Australia and the required investment over the coming years. What role will Impact Ag Partners play?

Killen: Impact Ag Partners — so, the U.S. and Australian arms together — has close to A$1 billion in assets under regenerative management. But there’s so much more to be done, and we see Australia as playing a lead role in the global transition.

The burning platform for me is that already about two-thirds of Australian soils are degraded, and they’re degrading at a rate that they can’t replenish themselves. On top of that, ag accounts for almost one-fifth of Australia’s carbon footprint, and our biodiversity is in crisis; last year, five times more species were added to the threatened species list than the average.

There’s an inherent tension between all these crises on one side, and the need to grow more food to feed a growing global population on the other. So the system needs a reset, and regenerative farming can help do it. I’ve always believed that profit and purpose don’t need to be enemies: you can farm and repair nature at the same time, on the same land, and with minimal (if any) trade-offs.

We currently regeneratively manage livestock, broadacre crops, irrigated crops, and permanent tree crops. And to us, it’s all about restoring and enhancing ecosystem function. Fixing the water cycle so we retain water in the landscape for longer, which in turn helps restore biodiversity both above and below the ground, which leads to increased soil carbon, which boosts productivity and resilience. It’s a positive loop, and it delivers for planet and profit.

4.) GAI News: What are the biggest hurdles to the adoption of regenerative ag in Australia — is it a lack of standardization/classification?

Killen: Regen ag is a bit of a catch cry at the moment. And I’ve heard it said that the lack of definition puts people off adoption. But I actually think that what puts people off is the idea that profit and purpose are mutually exclusive. Growing food isn’t philanthropic; we need to make a profit, otherwise farmers can’t stay in business.

So I think the profit piece is what will actually make the biggest difference in accelerating adoption. And whether that comes from just reducing your input costs, or attracting a premium for regenerative products, it’s all upside.

When Impact Ag takes on a new asset, we’re looking for all the ways we can stack returns on the one property. What we do depends on the landscape in front of us, but our team investigates, assesses and dips into our Green Box for proven solutions. Like regenerative grazing or cropping; a soil carbon project; a renewable energy or biodiversity; and perhaps product premiumization because of all the other nature-positive steps we’ve taken to grow that food or fibre.

5.) GAI News: What role does Wilmot Cattle play in this new partnership? Will it serve as a model for regenerative ag land management that other ranches can emulate?

Killen: Wilmot has long been a showcase for how to do regenerative agriculture profitably and at scale. Not just the beef production side, but the soil carbon and biodiversity projects that Impact Ag Partners has collaborated on, which not only diversify farm incomes, but build in the resilience the system needs to manage future shocks.

Wilmot has now come under the management of Impact Ag Australia’s farm operations division, and we are really excited to build on the good work done there by Alasdair and the team — looking for new opportunities to deliver stacked returns for nature and profit.

6.) GAI News: Is there anything more you would like to add?

Killen: It’s an exciting time for the company, with lots in the pipeline. In August, our U.S. business, Impact Ag Partners LLC announced it had entered into a business agreement to acquire the Australian Food and Agriculture Co. for A$780 million (US$510 million).

There’s some water to go under the bridge, with approval from shareholders and the Australian Foreign Investment Review Board still to come. But what a strong statement it is to the global ag community about the investment appetite for regenerative solutions, and Australia as the right place to deploy them.

GAI News: Quite a busy season, thank you again and congratulations to the Impact Ag team!

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