OK there, not ok here?

October 6, 2017

The New Zealand superannuation fund has taken a stake in an Australian cattle stud:

 The New Zealand Superannuation Fund has made its first offshore farm investment, taking a stake in Australian beef stud Palgrove for an undisclosed amount.

The deal, which has received approval from the Australian Foreign Investment Review Board, will increase the fund’s rural land portfolio to 33 farms worth approximately $340 million, it said in a press release. In its 2016 annual report, the Fund said it owned 21 farms valued at $204 million. As at Aug. 31 this year, however, it had 1 percent of its $35.7 billion fund invested in rural farmland.

Chief investment officer Matt Whineray said Palgrove is a high quality, highly successful business that complemented the Fund’s existing investment portfolio. “We are pleased to make the fund’s first offshore investment under our rural land strategy. We continue to see rural land as an attractive long-term investment and a good diversifier for our portfolio,” he said.

Palgrove is based near Stanthorpe, Queensland, but has livestock and properties now spread across Queensland and New South Wales, according to its website. The stud currently runs about 5,000 head of registered cattle.

The Super Fund was set up in 2001 to help meet the country’s future pension needs. Its acquisition of rural land is driven by a desire to diversify its investments and to benefit from increased demand for meat and proteins as Asian countries become wealthier and favour a more western diet.

The business will continue to be run by the Bondfield family who founded it.

NZ Super Fund portfolio manager Neil Woods, said it intends to invest more in Palgrove to help it expand.

“The arrangement is we will grow the business through the purchase of land and the development of new technology to increase it size and value. We could invest another $100 million in this business in the medium term.”

He said Palgrove was a first step in rural investments in Australia and the fund was on the look out for other agriculture investments.

The stud’s founder David Bondfield said the fund had the right approach to investment in the sector.

“This partnership with NZSF gives the Palgrove business the capacity to grow its cattle numbers to meet increasing demand from our clients. It also enables us to accelerate genetic development.”

I know the Bondfields and admire their business. This should be a good investment for the super fund.

It is important for it to spread its risk and to invest both in New Zealand and overseas. I am also open to foreign investment here.

However, not everyone shares my views.

Some are vehemently opposed to foreign investment.

It would be interesting to know if that applies to both inwards and outwards investment.

If it doesn’t, how do they explain that it’s okay for us to invest there but not for people form other countries to invest here?


NZ Superfund looking for foreign farms

January 22, 2013

The New Zealand Superfund has already invested in farms here, now it is looking further afield:

New Zealand’s state pension fund is looking at buying overseas farmland amid growing demand for food in emerging markets, and it is also interested in assets offered by struggling European banks as well as catastrophe insurance.

Crop, dairy and livestock farming operations in North and South America, Australia and Europe are potentially attractive, Matt Whineray, general manager of investments at the NZ$21 billion ($17.5 billion) New Zealand Superannuation Fund told Reuters in an interview.

“If we go and buy a farm, we will sell a little bit of global equities and fixed income,” Whineray said, adding that the fund was looking to increase its allocation for rural farmland to 3 percent from less than 1 percent at the moment. . .

The advent of a rising middle class in many emerging economies such as China and Indonesia has prompted other pension funds around the world, including those Australia, Canada and Sweden, to increase investments in farms.

But the difficulties of directly buying land overseas and the lack of large size farmland available has proved a challenge for big institutional investors.

“Farms and forests are more difficult to buy than equities, so it provides a real challenge,” Whineray said.

But he added: “You haven’t got a big weight of institutional money in those things at the moment. That’s part of the reason that the opportunity exists.” . . .

What will the people who don’t like foreign investment in farms here think of this?


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