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Warakirri to build next portfolio with net-zero goal

Grain Central, October 31, 2023

Warakirri Asset Management has capacity to build a new broadacre portfolio to manage alongside its Warakirri Cropping group of properties which covers 155,000ha nationally. Photo: Warakirri Cropping

WARAKIRRI Asset Management is working with institutional investors on a new cropping strategy that will own and operate a diversified portfolio of investment-grade broadacre cropping and infrastructure assets across Australia.

In a statement, WAM said the strategy aimed to deliver strong risk-adjusted returns, with a positive impact on the environment and the regional communities in which it plans to invest, including the inclusion of specific carbon-reduction strategies and a long-term pathway to net-zero emissions.

The strategy will own and develop a geographical diverse portfolio of assets  across different climate and production zones, with the flexibility to grow a variety of crops and serve multiple markets.

Founded in 1993, WAM is one of the most experienced specialist Australian agricultural investment managers, with more than $3 billion in assets under management and commitments, and has been investing in and developing large-scale broadacre assets since the 1990s.

“We are excited to be bringing to market a new sustainable cropping strategy, offering institutional investors the opportunity to access the competitive advantages offered through an investment in Australian agriculture,” WAM managing director Jim McKay said.

“There is a clear opportunity for large scale investment, supported by highly experienced and quality management, to extract higher margins and contribute positively to the environment at the same time and this strategy reflects our high conviction that Australian agriculture will continue to provide stable, long-term return as the world seeks a more sustainable future.”

WAM has exclusively managed Daybreak Cropping and Warakirri Cropping, large-scale portfolios owned by institutional investors including Canada’s PSP Investments.

Management of Daybreak Cropping transferred to Altora Ag early this year, meaning WAM can offer its its capability to new institutional investors for the first time in eight years.

“Australian agriculture portfolios managed by Warakirri for some of the world’s and Australia’s largest pension funds have delivered competitive returns in excess of 10 percent per annum over the past decade with low bond-like volatility.

“Australian agriculture provides significant portfolio diversification benefits and is one of few investments to provide a true inflation hedge.”

WAM investment director agriculture Adrian Goonan said the WAM team’s commitment to a holistic approach to sustainability was aligned with its ambition to continue to define what agriculture looks like into the future.

“We continue to see value opportunities and significant upside in productivity from large-scale cost-effective productivity and amelioration strategies which will drive strong cropping returns into the future, whilst playing our role in decarbonising the economy with our carbon-abatement strategies,” Mr Goonan said.

WAM has successfully launched two wholesale funds in recent years, the Warakirri Farmland Fund and Warakirri Diversified Fund, with more than $250M raised from Australian and foreign investors and one of Europe’s leading pension funds.

These funds focus on buying and developing diversified portfolios of investment-grade agricultural property under long-term leases to high-quality agricultural businesses as tenant partners.

 

 

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