GO.FARM has announced a capital raise of $300 million, launching a Responsible Agriculture Fund as part of this, which will drive investment into the transformation of natural capital assets.
It will invest a total of $600 million in equity and debt into acquiring and transforming geographically diversified agricultural assets to deliver investors strong-risk adjusted returns.
The Responsible Agriculture Fund is aimed at generating a net fund internal rate of return (IRR) of 12 to 15 per cent per annum, with a gross asset level IRR of 15 to 19 per cent.
GO.FARM founder and managing director, Liam Lenaghan, noted the firm’s track record in delivering transformational returns well above the standard threshold, given agricultural assets typically deliver operating returns between 7 to 9 per cent.
“We’re focused on excellence in execution. From team capacity and capability to acquisition behaviour and operational performance, we have dedicated agricultural specialists in all facets of the business,” Lenaghan said.
“We’ve got the track record to support taking a fund to market and we’re thrilled to be finally bringing this offering to investors.”
He added the fund addresses a “profound capital gap” in the market, noting some $400 billion of fresh investment is required in order to meet the National Farmers’ Federation’s roadmap for the industry to deliver $100 billion in annual farmgate production.
Moreover, with farmland generating an 8.5 per cent compound annual growth rate (CAGR) over the past two decades and water entitlements seeing 6.7 per cent CAGR over 15 years, Lenaghan believes “simply buying the market” will not translate to real agricultural investment success or delivering positive impact.
“That requires deep domain expertise and a willingness to be deliberate in asset transformation to drive a step change in productivity, sustainable earnings and delivery positive impact within regional and rural communities,” Lenaghan said.
“The feedback we’ve had from investors is that they’d like fund exposure where they can get four or five of our best ideas in one investment, giving them geographical spread across a number of climate zones, water sources and crop types. This is what the Responsible Agriculture Fund will deliver.”
Earlier this month, $9 billion fund Qantas Super announced it has committed $200 million with GO.FARM to “transform” underutilised agricultural land into horticultural projects in NSW’s Riverina, northern Victoria, and other parts of Australia.
The fund clarified that $150 million has already been allocated to two GO.FARM assets – Riverina Trust and Sandmount Farms – which Qantas Super said would unlock substantial value by converting more than 5,000 hectares of land with substantial water holdings into high-yielding, water-efficient horticultural crops.
