April 9, 2019

ASX-listed Pinnacle Investment Partners (PIP) has entered into a strategic partnership, taking a stake in Riparian Capital Partners (RCP), the newly formed boutique investment firm launched by former members of the Blue Sky executive team.  

This deal will make RCP the thirteenth affiliate of Pinnacle, which has existing partnerships with investment affiliates that account for more than A$50 billion (US$36 billion) in funds under management.

“We are really excited to be launching this new affiliate, which represents our first investment into the agriculture sector,” said Ian Macoun, managing director, Pinnacle. “We see very strong structural tailwinds to agricultural assets including water and believe the RCP team are well positioned to provide a range of institutional investors access to this growing asset class.”

Riparian was established in Brisbane in January of this year by managing partner Nick Waters, who was the former investment director of the Blue Sky Real Assets division, and responsible for the oversight of the water investment strategy. Waters has since been joined by Patrick Hayden who has also assumed the role of managing partner at the new firm, after having previously been a director of the U.S. subsidy of Blue Sky.  The Riparian team is rounded out by Brent Loeskow and Matthew Houlahan, both former investment associates with Blue Sky Real Assets.

“We’re particularly happy with the team we now have in place at RCP who have a strong working history together and a broad skill set and depth of experience that extends across the agriculture sector,” said Nick Waters, managing partner, RCP. “Importantly, we’ve been able to structure the business in a way that ensures complete alignment of outcomes between the team and our investor clients.”

As a newly-minted water, agriculture, and food investment firm, the capital gained from Pinnacle in exchange for a minority stake in the company will avail RCP of the funds needed to invest both in the business and alongside investor partners. Meanwhile, the relationship forged through the deal will give RCP access to PIP’s institutional grade non-investment support services.

“At RCP, we focus on investments backed by real assets that are critical to the production of essential goods,” said Waters. “We continue to see compelling investment opportunities in Australian agriculture and look forward to working with patient capital to unlock value across the sector.”

A Battle for Blue Sky

The announcement of this partnership comes amidst a battle for control of Blue Sky Alternative Access Fund between Pinnacle and Wilson Asset Management.

In October 2018, only one day after Blue Sky’s CFO Michael Whyte resigned, Blue Sky Alternative Investments announced a split with its $177 million Blue Sky Alternative Access Fund (BAF).

Concurrently, Pinnacle initiated plans to launch Alterum Investment Management, a new affiliate tasked with taking on and managing the assets of the BAF.

The initial mandate for Alterum to begin managing BAF’s assets, which include holdings in Blue Sky Water Fund and a range of other ag and venture capital investments, was scheduled for January 1, 2019, however, in November of last year, Wilson Asset Management made a move of its own, offering a no-fee period for Blue Sky-managed assets, and to match the range of services being proposed by Alterum.

As the first quarter of 2019 is behind us, it appears that no significant advances have been made between the two rivals since January of this year, reports Business News Australia.

If plans align, and if Alterum assumes the helm of BAF,  plans are that it will focus on private markets and multi-management, under the leadership of Andrew Champion, the current executive chairman of BAF.

-Lynda Kiernan