Australian Farmlands Fund
An investment in natural capital through the purchase and regeneration of Australian farmland and water.
The Fund invests in southern Murray-Darling Basin farmland and water assets. Underutilised farming properties are repurposed with quality infrastructure to produce higher value crops with scaled reforestation for biodiversity protection and carbon sequestration outcomes.
The Fund is now closed to new investors.
The Funds comprise two Australian unregistered, unlisted unit trusts – the Australian Farmlands Fund and the Australian Farmlands Operating Fund that are ‘stapled’ in a legal relationship.
The Funds represent an opportunity through which sophisticated and wholesale investors can access an agribusiness portfolio of irrigated farmland, water and environmental assets in the southern Murray-Darling Basin (sMDB).
Financial returns are delivered through the regeneration of underutilised irrigation farming operations to deliver high-value organic and conventional crops, sustained by ecosystem protection to deliver long-term returns to investors. Investors will gain the benefit of Kilter Rural’s extensive experience delivering impact through farmland, water and ecosystem regeneration.
For 15 years Kilter Rural has deployed and refined its investment strategy via a $400 million mandate for a $25 billion institutional investor. The strategy has outperformed in delivering financial returns with significant and measurable environmental and social benefits.
A key feature of any Kilter Rural-managed landscape is planning for and mitigating climate risk with farmland providing a net carbon sink, which involves sequestering more carbon than operations emit.
In 2019, Kilter Rural was awarded Impact Asset Manager of the Year at the Asia Pacific Impact Investment Summit.
Exit options: The Funds’ aggregation approach makes for an attractive investment option to corporate and institutional-grade investors and provides a variety of exit strategies.
The Kilter Rural strategy for farmland regeneration has proven across 15 years to moderate risks associated with climate change and weather events. It produces high-value agricultural commodities balanced by advances in soil and ecosystem condition to deliver sustained yield increases and improved long-term asset value.
Projected investor IRR and elasticity when key variables are applied
|SCENARIO||LOW CASE||BASE CASE||HIGH CASE|
|Land Capital Growth||4.0%||6.5%||8.0%|
|Water Capital Growth||4.0%||6.5%||8.0%|
|Crop Prices Received (% deviation from ten year average)||-12%||100%||+12%|
|Crop Yields (% deviation from ten year average)||-5%||100%||+5%|
Notes to key variables
Disclaimer: The fund returns are projected only and based on assumptions and forecasts that are accurate as at 30 June 2020 as outlined in the Information Memorandum for the KAFF. The figures are projections only and are not an indication of performance.