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Agribusiness: $60m raised for AAM’s Diversified Agriculture Fund

Beef Central, December 17, 2019

 

Agriculture investor AAM Investment Group expects to make property acquisitions in beef, lamb and poultry sectors, having raised more than $60 million in its initial subscription offer to invest in the company’s AAM Diversified Agriculture Fund.

AAM says the fund will feature diverse, large-scale quality Australian agricultural assets, with a focus on precision management, sustainable practices and renewable energy technologies to enable the business to enhance the operations of existing assets and do more with increasingly scarce resources. The project aims to tap into rising global appetite for animal protein and mitigate against the impact of drought.

Group managing director Garry Edwards said the investor response to the Diversified Fund exceeded expectations and attracted solid cornerstone investment. A large percentage of investors who already held interests in AAM’s other funds invested in the new Diversified Fund.

“Those investors are telling us that this asset class has been difficult to access, but we are simplifying it by having one diversified fund across several mainstream agricultural sectors,” Mr Edwards said.

He said private investment could work alongside public infrastructure spending – such as the Wyangala Dam upgrade in NSW – to more sustainably support regional Australia.

“The government is investing $650m in dam capacity upgrades to increase utilisation and water reliability, and AAM is investing in on-farm infrastructure to increase the productive capacity and sustainability of our land assets,” Mr Edwards said.

AAM will use the $60 million raised in the initial Offer to acquire the Fund’s seed assets in the poultry infrastructure, mixed livestock and cropping sectors, including:

  • 100pc ownership of the Sunshine Farms Aggregation, a diversified portfolio of grazing/farming properties in central western NSW, which AAM will develop into a mixed livestock and broadacre cropping operation.
  • A 44.1pc equity stake in AAM’s Southern Cross Poultry Fund (SCPF) to allow SCPF to increase its annual production to 20 million chickens across multiple farms in South Australia.

The Diversified Fund’s core strategy is to develop sustainable, integrated operations within the key animal protein sectors of beef, chicken and lamb, as well as cereal grains and plant proteins.  The Fund will acquire grazing, dryland and irrigated farming land with associated water licences, and develop on-farm infrastructure to enhance land uses and increase asset value.

Following the completion of the Diversified Agriculture fund expansion, AAM will now manage more than $260 million worth of diversified assets across the poultry, pastoral, cropping and timber industries.

Southern portfolio manager for the Diversified Fund, Nathan Morris, said the clear feedback from investors was that they liked the fact that AAM was an active manager, with managers on the ground operating the assets. “We’re not passive property investors,” he said.

The company expects to build critical scale and further diversity in the new Fund over the next two years.

“AAM believes that investors recognise the need for significant investment in the Australian agricultural sector,” Mr Morris said. “That investment will enable the sector to make the best use of the precious natural resources available to it, and help the sector satisfy the growing global demand for high-quality food and fibre products.”

Founded 12 years ago as a private asset and investment manager, AAM expanded into the public investor market in 2016, launching three wholesale funds – a $62 million poultry fund, an $85 million pastoral trust and a $25 million sustainable softwood trust.

Monies raised for its fourth, diversified fund will be spent on the two seed assets, with the potential for further raising and acquisitions down the track.

 

 

 

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  1. Are they looking at using Regenerative farming techniques? If not they should. Very easy way to reduce costs, increase profits, become far more sustainable and more resilient to droughts and floods, and also produces far healthier and more nutritious food. On top of that they will be able to claim government credits/payments for storing carbon which otherwise wouldnt be possible if they use modern farming practices. Its a no brainer really.

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