The global financial crisis may have hit tax-effective agribusiness schemes hard, but the prospects of the small group of companies that survived are anything but gloomy. "We're actually tapping into the new GFC, which is the global food crisis," says Wayne Overall, executive director of agribusiness managed investment scheme operator Almond Investors Limited
Last week, bids closed for an 83% stake in Fonterra's biggest supplier, Dairy Holdings, which oversees 72 South Island farms. Bidders reportedly include Chinese dairy giant Bright Dairy, a pastoral fund owned by Australian investment bank Macquarie Group, British private equity firm Terra Firma. US private equity firm Carlyle Group and the Harvard Endowment Fund.
Macquarie Agricultural Funds Management owns 31,500sq km of Australian grazing land on which it runs cattle and sheep.
"We want to make agriculture sexy," says the head of Macquaraie's Retail Agribuiness operation.
Private equity and fund managers name South America a top place to buy, lease and manage agricultural lands for profit.
Fears that faceless corporations and international investors would become the new barons of the Australian bush have proved to be unfounded
Wary of fluctuations on Wall Street, more wealthy Americans, private funds and foreigners are putting money into parcels of cornfields, fruit orchards and other US agricultural products.
Macquarie Group's agricultural division has launched a new cropping fund that will buy large-scale grain properties in Australia and Brazil.
Macquarie Group Ltd. plans to own and run 500,000 acres of soybean and grain farms in Brazil over the next three years
Macquarie Agricultural Funds Management has started up the Macquarie Crop Fund to "acquire or lease grain and oilseed properties located in geographically diverse regions of Australia and Brazil".
Agricultural funds made 9.5% last year, according to data provider BarclayHedge, while almost every other investment opportunity lost money.
The emergence of the farmland asset class is not without pitfalls with the provision of food always highly political and a tentative global economic recovery potentially threatened by the H1N1 flu pandemic, fund managers said.
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