By Gerelyn Terzo, Global AgInvesting Media
Warakirri Asset Management, a Melbourne, Australia-based asset manager, has expanded its Diversified Agriculture Fund (DAF) with the addition of a horticulture aggregation, buoying the strategy beyond the A$150 million (US$95.1 million) portfolio value threshold. As the maiden NSW investment for this portfolio, and with an A$15 million (US$9.5 million) price tag attached, the off-market deal included a pair of orchards in the Riverina’s Murrumbidgee Irrigation Area, comprising a modern 160 hectares (395.4 acres) of planting. Warakirri will be working alongside Eureka Farms to run the orchard, bringing the total number of portfolio holdings close to a dozen.
Launched in 2020, the Warakirri Diversified Agriculture Fund boasts a portfolio of assets including high-quality berry, citrus, almond, soft leaf vegetable, agri-infrastructure and wine sector assets. With the new orchards, the DAF portfolio’s citrus exposure climbs to approximately 13% of the fund, according to Portfolio Manager Steve Jarrott. He also noted that the acquisition significantly enhances the fund’s geographic spread while diversifying climate, water and counterparty exposures.
The aggregation features a range of quality citrus varieties, critical infrastructure and coveted high-security water entitlements while also introducing a new tenant partner to the fund. The asset will be operated by Eureka Farms Australia, a subsidiary of citrus industry farm manager Southern Cross Farms (SCF) and supported by packer/marketer Mildura Fruit Company (MFC). Buttressed by a long-term agreement, the deal includes the ongoing supply of high-quality citrus into MFC’s nearby Pacific Fresh facility in Leeton. SCF has over 30 years of operating history under its belt, while MFC represents one of Australia’s biggest packers, marketers and exporters of quality citrus.
DAF Portfolio Manager Jarrott stated, “We’re delighted to add another prime horticulture asset in a great region and a sector we believe to be one of the most attractive in the high value space. The Riverina is one of the most productive and agriculturally diverse regions in Australia, and the citrus orchards of the Leeton and Griffith area are renowned for both high-quality fruit and productivity.”
Agriculture is one of Australia’s booming sectors, second only to the country’s mining industry in terms of its importance to the economy, and is also out front on the global stage for ag production. The DAF The Fund targets a total portfolio level IRR after fees, expenses and fund level tax of 7 percent to 11 percent per annum via a stable income stream from a combination of leasing the assets to high quality agricultural businesses, which are considered tenant partners, and long-term capital growth. Warakirri’s ag fund is currently open to wholesale and high-net-worth investors.
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