Australian Farmlands Funds
The Australian Farmlands Funds represent an opportunity through which sophisticated and wholesale investors can access an agribusiness portfolio of irrigated farmland, water and environmental assets in the southern Murray-Darling Basin. As at 31 March 2020 the fund has:
- A$33.3 million in assets under management, with a capital allocation of 40% to water entitlement purchases, 34% to land and development, and 26% for working capital and undeployed cash.
- Delivered a performance, annualised since inception (October 2018), of 3.2% to 31 March 2020.
- Five farms and more than 2500ML of water entitlements purchased with land regeneration underway.
The Phase 1 capital raise was fully funded in October 2018, with investments delivering a first crop of field tomatoes harvested in Autumn 2020.
Watch the video to find out more and download the Australian Farmlands Funds Information Memorandum.
Why Invest in Farmland?
It has been proposed the world may be facing ‘peak land’, meaning it has run out of good arable country. Astute investors see opportunities presented by the global demand for protein driven by population growth, a growing global middle class and reducing availability of arable land.
In the same way many think about food security we should concern ourselves with soil security. The maintenance of the world’s soil resource is fundamental to providing sufficient food and fibre.
Currently 7 billion people rely on food grown off around 11% of the global land surface. Of this 11% only 3% is estimated to be inherently fertile. In 2010 National Geographic proposed the world may be facing ‘peak land’, meaning it has run out of good arable country.
Astute investors see opportunities presented by the global demand for protein driven by population growth, a growing global middle class and reducing availability of arable land and fresh water to produce the food.
Investing in farmland through Kilter Rural’s commercial stewardship philosophy delivers a pathway to enduring income from improved yields, multiple revenue streams and capital growth from redeveloped farming landscapes.
The philosophy delivers resilience through large-scale intervention on farmland to protect and enhance long-term function of ecological systems while sustaining long-term agricultural production.
The Australian Farmlands Funds has been certified by Responsible Investment Association Australasia according to the strict operational and disclosure practices required under the Responsible Investment Certification Program.
The program helps investors by providing standardised and consistent information about certified responsible investment products, services and policies.
The certification symbol signifies that an investment product, service or policy takes environmental, social, governance or ethical considerations into account along with financial returns. Visit www.responsibleinvestment.org for details.
Farmland Asset Returns
Historical analysis shows that investment in farmland benefits the risk return profile of a balanced investment
Over the 12-Year Period from 2000 to 2012, the top 25% of farms delivered returns exceeding that of Australian Equity, Property REIT and Government Bonds
Over the recent 5-Year period from 2007 to 2012, Average Farm Return has surpassed that of Australian Equity and Property REIT
Farmland is less volatile than investing in Australian Equity and Property REIT
Farmland Investment has a low correlation with the All Ordinaries Index and the S&P 200 A-REIT Index.
Farmland Investment experience
Kilter Rural invests in farmland to maximise opportunities provided by drivers of food security, climate change, demographic change and sustainability.
Since 2006 Kilter Rural has been implementing its Future Farming Landscapes investment model, purchasing 40 properties, covering 10,000 hectares (24,700 acres) of farming country in Australia.
Farmland is renewed at scale to deliver long-term resilience and reduced exposure to traditional risks. This is a core plus strategy - adding value to deliver farmlands with a sustainable, global competitive advantage.
Our wholesale and sophisticated clients are aligned with the Principles for Responsible Investment but recognise the opportunities provided by drivers of food security, climate change, demographic change and sustainability.