Warakirri is planning to raise over half a billion dollars to acquire and operate dairy farmland across both Australian and New Zealand. Picture: File (Nicole Cleary)The Weekly Times | 28 February 2025Warakirri targets $500m-plus for new dairy farmland fund
by Tallis Miles
Australian agricultural asset manager Warakirri has announced it is targeting a $500m-plus expansion into the dairy farming sector via a new trans-Tasman investment fund.
Warakirri Asset Management’s new dairies strategy is planning to raise over half a billion dollars to acquire and operate dairy farmland across both Australian and New Zealand.
Initially, Warakirri is looking to raise $150m in capital to use alongside some debt to start the portfolio.
The strategy is aiming to deliver risk-adjusted returns of more than 10 per cent per annum by investing in a diversified portfolio of investment grade dairy farming and infrastructure assets.
When asked by The Weekly Times if any seed assets had been acquired already, Warakirri declined to comment.
The new strategy will be led by Ben James, the current Aurora Dairies chief executive, a business of Canada’s PSP Investments, which has been managed by Warakirri since 2019.
Aurora Dairies owns 57 farms across Australia and New Zealand, becoming the largest producer of milk in Australia at present.
“Dairy is the third largest food source by volume globally and not only is total milk consumption growing, but per capita consumption is growing with around 15 per cent of all new food consumption via dairy products,” Mr James said.
“Growing demand and shrinking production has supported milk price growth over the long term which has outpaced inflation, and which is expected to be supported by widening milk supply gaps.”
Warakirri managing director Jim McKay said: “We believe significant long term investment opportunities continue to exist in the dairy industry and have seen a constant increase in demand for milk and dairy products both domestically and in the Asia Pacific region.
“There is a global supply deficit in milk looking out to 2030 and beyond of approximately 20 million tonnes of liquid milk supply, which is approximately a 17 per cent deficit to total demand.
“This strategy reflects our high conviction that the dairy industry has a compelling structural imbalance that underpins long term return on investment.”
Established in 1993, Warakirri Asset Management has a cropping vehicle that operates across 11 aggregations in NSW, Queensland, Victoria and Western Australia totalling about 155,000ha.
It also operates the Warakirri Farmland Fund, which owns high-density stone fruit orchards in the Goulburn Valley and northern Victoria, plus the Warakirri Diversified Agriculture Fund, which recently exceeded $150m in value following the purchase of a 160ha orchard in the NSW Riverina for $15m.
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...Warakirri’s new strategy comes as Canadian pension investment manager PSP Investments moves to internalize the management of Aurora Dairies, a company Warakirri has managed on PSP’s behalf since 2019. Current Aurora Dairies CEO Ben James will lead Warakirri’s new strategy, which aims to produce a risk-adjusted return of more than 10 percent per annum, leveraging the experience of the Warakirri team involved in Aurora. James joined Warakirri in 2012 as an operations manager and soon became CEO of Warakirri Dairies, the portfolio of which would become the seed assets for Aurora Dairies. He told Agri Investor that PSP’s investment in 2019 led to a “mandate for expansion.”
“We underwent some pretty significant expansion in the Aurora Dairies business, and we’re particularly proud of what we’ve been able to achieve there,” James said. “It comes back to the quality of our team to be able to do that – going from 11 farms to over 50 farms, from 8,000 cows to more than 50,000 cows, from 65 million liters of milk to over 300 million liters of milk, and from a business that had 80 people to a business that has around 500 people.”
... Warakirri head of managed funds platform Joe Marassa said the new strategy will commence once the fund reaches A$150 million in initial capital commitments followed by a portion of debt “to help get it up and running.” Marassa said Warakirri has already started conversations with investors including domestic superannuation funds, global pension funds and domestic and offshore asset consultants. “You’ve just got to work your way through the capital-raising process, particularly with some of the offshore clients who haven’t necessarily had experience or exposure to dairy as a strategy – they may be more familiar with forestry or cropping.
]Warakirri's] other portfolios include Warakirri Cropping, which manages a 155,000ha broadacre cropping portfolio on behalf of Rest Super, and Solterra, which manages a separate 26,000ha broadacre cropping portfolio on behalf of Farmland Reserve, a company associated with the Mormon Church. Apart from the new dairy fund, Warakirri has two open-end funds currently in market: its Farmland Fund and Diversified Agriculture Fund, which have more than A$100 million and A$150 million in portfolio assets, respectively.
The internalization of Aurora Dairies follows a trend for PSP, which noted in its 2024 annual report that its portfolio and operations have expanded significantly over the past decade, and that its “global scale” required a shift in strategy:
“This evolution included greater internal management, diversification into private markets and international expansion to ensure PSP Investments exceeds its long-term return objectives,” said the annual report.
In 2022, PSP internalized the management of its two Australian cropping companies, BFB and Daybreak Cropping, ending Warakirri’s management of the latter after a transition period. A PSP spokesperson confirmed that the management of Aurora Dairies will transition from Warakirri to its own independent team, with the switch to come into effect on August 1.
