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Dinner in Restaurant

Why are institutional investors shy of the ag sector?

While offshore institutional investors have been active in the Australian ag space (see this weekly property review published a fortnight ago), Australian superannuation funds have continued to come under scrutiny over their lack of appetite for domestic agricultural investment.

This week’s property review examines their lack of investment interest.

It appears the only Australian corporate directly investing in local ag assets is the Queensland government-backed investment fund, QIC, which holds an 80 per cent stake in the North Australian Pastoral Co, secured back in 2016.

Separate from its NAPCo stake, QIC purchased Roma district grazing property Stuart’s Creek – the last remaining asset held by regenerative ag-focussed Packhorse Pastoral Co – as a foundation asset for its new Nature Capital Fund, established in the previous year.

No price was disclosed, but as a guide, Packhorse paid $30 million for the 8400ha holding in July 2021, including 800 breeders valued at around $3m.

QIC’s Nature Capital Fund has acquired a 600-ha irrigated sugarcane property south of Mackay.

Some might argue that Macquarie Bank’s Paraway Pastoral is another Australian institutional investor, as it is one of the country’s largest property owner-operators.

But the agricultural fund comprises mostly international institutional investment – so in reality, it is an Australian business managing foreign capital.

Set out below, two property investment & finance experts – David Goodfellow and Michael Whitehead – who have been involved in raising capital for institutions give their insight into the likely future investment strategies of Australian superannuation funds.



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