Investment Thesis

Persistent growth in the world agricultural footprint has been vital in sustaining people and livelihoods but this has concurrently enfeebled, degraded or removed natural ecosystems across the globe.

Agriculture is a key contributor to global warming, generating significant carbon emissions, and through removal of forests reducing carbon sequestration services. It is the major user and polluter of water, and native vegetation clearing is challenging remaining ecosystems and biodiversity on Earth.

In 2004, we identified a global strategic need and investment opportunity by stabilising the world’s agricultural footprint and producing more food off existing farmland. Our regenerative agriculture model repositions Australian irrigated farmland to sustainably produce more food in an emissions-constrained world.

We deploy capital from progressive-aligned value investors into the regeneration of inefficient irrigated cropping operations with depleted soils, high CO2 emissions and negligible ecosystem function. This unlocks value through reformed farm layout, application of best available technology, operational emissions reductions, soil productivity transformation and large scale revegetation of forests for scaled CO2 sequestration.

The Kilter Regeneration Model builds on 18 years of leadership resetting the standard for Australian irrigated agriculture. Our model moderates impacts from extreme weather events, while advanced soil productivity and ecosystem health underpin new diversified high-value crop rotations. Our farmland value-add investment strategy involves:

• Farm regeneration: Aggregate for scale, repair soil, import irrigation technology and new diversified cropping regimes to bridge the gap between current and potential yields
• Water security: Ensure locations with high reliability water entitlement and secure water delivery
• Mitigating price risks: By working through established off-take agreements
• Mitigating climate risks: With farm landscapes designed to yield through escalating weather events
• Offering exit options: The aggregation approach provides exit strategies.

In a Kilter Rural landscape, environmental improvement drives agricultural productivity, financial performance and long-term capital appreciation. Our investment thesis is enhanced through the application of the Accounting for Nature Framework methodology for assessing and reporting on the condition of environmental assets.

Water

Less than 1% of Earth’s water is accessible and drinkable.

As Australia’s most experienced water manager, we have been directly involved in Australian water markets since the 1990s. Our team has a deep understanding of the Murray-Darling Basin water market and stakeholders. We are at the forefront of innovation,  deploying products that help irrigators manage water risk while delivering responsible investor returns.

As an alternative real asset class, water provides opportunity for diversification and risk mitigation with low correlation to traditional assets, such as listed property and equities. It is one of the few assets capable of providing a genuine alternative investment opportunity.

Water assets generate returns from the deployment of the physical water associated with the asset into the water market for irrigation use and from asset capital appreciation. Australian water markets offer one of very few opportunities globally for investors to obtain direct exposure to this most vital of assets.