Fairfax News | 8 March 2014
Euro investors eyeing farms
by ALAN WOOD
There is growing interest from international investors in the New Zealand agricultural sector, particularly from wealthy Europeans, boutique funds manager Mint Asset Management says.
The country's agricultural assets were often sought after but not always available for sale, given the lack of liquid investments in the sector, Paul Richardson, director and chief investment officer for Mint, said.
Richardson agreed the lack of listed companies directly involved in agriculture made investment in the sector harder. But interest had been building for more than a year.
There are exceptions that do allow direct investment. On the NZX these include units in the Fonterra Shareholders Fund and Synlait Milk. On the Unlisted platform there are Synlait Farms and Rural Equities. Dairy-farm investment company MyFarm, with syndicated dairy farms, also has an online share trading facility.
Richardson also noted that farms could be bought by larger investors though overseas buyers would need to get Overseas Investment Office approval.
"But . . . you're seeing offshore investment in New Zealand, particularly surprisingly enough from Europe from family office investment groups . . . those are people who've made a lot of money in their business, maybe very large companies out of Europe for example.
"The equivalent here might be someone like Graeme Hart, who has Rank and then he's made money, so he's got to set aside a fund effectively to manage for himself. So these groups are very conservative, long-term, they're looking for interesting global trends and themes," Richardson said
The New Zealand agribusiness story, plus support from the currency which had risen in reflection of a healthy economy, were some of the reasons for the overseas interest, even though a higher kiwi meant it was more expensive to invest here. Milk product exports were at record levels, he added.
Inquiries from investors about agribusiness often resulted in interest in other sectors.
"Mint has received quite a lot of approaches, [investors] from overseas who are doing the research globally . . . when people get here there's a more of a broader interest, realising there's more to New Zealand than just dairy farms -interesting companies. You've got Xero probably attracting a bit of attention."
Direct investment into farming was hard work, requiring capital input and thorough management, Richardson said.
"I reckon personally they should talk to professional managers and advisers to do that sort of work, and that's what you're seeing. The [New Zealand] Superannuation Fund has invested in farms, but so have overseas groups like the Harvard [University] trusts, like the big New York teachers pension-based fund, [and] Cref," he said.
Mint provides investment vehicles and solutions for retail and institutional investors. It was founded by Rebecca Thomas in 2006. Thomas and some of her team were in Christchurch earlier this week talking to financial advisers in the city.
Euro investors eyeing farms
by ALAN WOOD
There is growing interest from international investors in the New Zealand agricultural sector, particularly from wealthy Europeans, boutique funds manager Mint Asset Management says.
The country's agricultural assets were often sought after but not always available for sale, given the lack of liquid investments in the sector, Paul Richardson, director and chief investment officer for Mint, said.
Richardson agreed the lack of listed companies directly involved in agriculture made investment in the sector harder. But interest had been building for more than a year.
There are exceptions that do allow direct investment. On the NZX these include units in the Fonterra Shareholders Fund and Synlait Milk. On the Unlisted platform there are Synlait Farms and Rural Equities. Dairy-farm investment company MyFarm, with syndicated dairy farms, also has an online share trading facility.
Richardson also noted that farms could be bought by larger investors though overseas buyers would need to get Overseas Investment Office approval.
"But . . . you're seeing offshore investment in New Zealand, particularly surprisingly enough from Europe from family office investment groups . . . those are people who've made a lot of money in their business, maybe very large companies out of Europe for example.
"The equivalent here might be someone like Graeme Hart, who has Rank and then he's made money, so he's got to set aside a fund effectively to manage for himself. So these groups are very conservative, long-term, they're looking for interesting global trends and themes," Richardson said
The New Zealand agribusiness story, plus support from the currency which had risen in reflection of a healthy economy, were some of the reasons for the overseas interest, even though a higher kiwi meant it was more expensive to invest here. Milk product exports were at record levels, he added.
Inquiries from investors about agribusiness often resulted in interest in other sectors.
"Mint has received quite a lot of approaches, [investors] from overseas who are doing the research globally . . . when people get here there's a more of a broader interest, realising there's more to New Zealand than just dairy farms -interesting companies. You've got Xero probably attracting a bit of attention."
Direct investment into farming was hard work, requiring capital input and thorough management, Richardson said.
"I reckon personally they should talk to professional managers and advisers to do that sort of work, and that's what you're seeing. The [New Zealand] Superannuation Fund has invested in farms, but so have overseas groups like the Harvard [University] trusts, like the big New York teachers pension-based fund, [and] Cref," he said.
Mint provides investment vehicles and solutions for retail and institutional investors. It was founded by Rebecca Thomas in 2006. Thomas and some of her team were in Christchurch earlier this week talking to financial advisers in the city.
