PROTERRA has split up and sold farms in its 22,500-hectare Corinella portfolio to 27 different Australian purchasers for more than $360 million in total.
The sale was managed by Danny Thomas, Tom Burchell and Elizabeth Doyle of LAWD who conducted more than 125 inspections and received 63 formal expressions of interest during the marketing process.
Proterra Investment Partners managing director Becs Willson said the decision to split up the portfolio was driven by unprecedented demand from the local community driving the strongest possible outcome for Proterra’s investors.
“Despite the additional work created by splitting up the portfolio, it is wonderful to see these assets return to local farmers who in some cases have been waiting years to expand their holdings,” Ms Willson said.
“It demonstrates the value that corporates bring to the agriculture space in aggregating, developing and operating large scale farming enterprises but also being flexible enough to determine the best exit strategy to meet the market and an absolute focus on maximising value for investors”.
The Corinella sale is expected to achieve a projected gross return (IRR) at final close in Australian dollars of more than 20 per cent.
The portfolio comprised three dryland farming hubs in Victoria, the 6959ha Wimmera Aggregation centred on Donald, the 6778ha Greens Creek Aggregation in the Stawell district, and the 6437ha Western District Aggregation at Lake Bolac, and Glenroy Plains, which covers 2212ha between Naracoorte and Penola in South Australia.
Proterra bought the farms which comprised the Corinella portfolio, one of the biggest of its kind in south-eastern Australia, between 2015 and 2019.
Its partnership operating model has transitioned them into highly productive revenue-generating aggregations using the latest agricultural technology available, and ensuring best management practice.
“Proterra’s strong commitment to employee and social governance principles are showcased throughout the portfolio via the use of cutting-edge technologies to minimise fuel usage, utilisation of organic fertilisers that allow soil microbes to flourish, and establishment of baselines for green carbon projects.”
Proterra’s Agriculture strategy pursues investment opportunities based on a view that rising global food demand will drive stronger commodity prices, therefore supporting higher farmland prices and increased investment and productivity on existing farms.
Proterra Investment Partners describes itself as an alternative investment manager focused on private-equity investments in agriculture, food, metals and mining.
Origin in Black River
With offices in Minneapolis, London, Sao Paulo, Singapore, Shanghai, and Sydney, Proterra launched as a standalone investment advisor and private equity fund manager from the Black River Asset Management private equity funds in January 2016.
The funds spun out from Black River Asset Management, a wholly-owned, independently managed subsidiary of Cargill Inc.
Although no longer an owner, Cargill maintains its relationship with Proterra as a partner to the funds.
Proterra Agriculture’s made its first investment in Australian farmland in 2009 while it was still a part of Cargill at Black River Asset Management.
The Black River Commodity Investment Partners Fund made a majority investment into BFB, a family-owned cropping and grain storage operation in the Riverina.
It sold in January 2019 to institutional investors.
BFB Pty Ltd was a vertically integrated dryland cropping business with over 44,000ha under crop, and based at Temora in New South Wales.
The Black River Capital Partners Fund (Agriculture) LP made additional growth equity investments to help BFB achieve its ultimate scale and owned around 70pc of the firm at exit.
“The BFB exit generated a significant premium over the assets and demonstrated the value that prudent institutional investors place on Proterra’s approach of hands-on management overlayed by strong governance principles.”