GO.FARM founder and managing director Liam Lenaghan.
Business News Australia | 20 May 2024GO.FARM to invest $600m in new agriculture fund
One of Australia's leading producers of several crops with 88,000 hectares of farms under management has announced plans to invest $600 million in a new agriculture fund, of which $300 million will come from a capital raise launched today while the other half will be funded by debt.
Founded by Liam Lenaghan in 2012, GO.FARM now has $1.1 billion in assets under management and is set to bulk up that figure substantially with the new Responsible Agriculture Fund, for which a water-rich development seed asset has already been secured.
Since 2015 the group has listed the Costa family office as a substantial holder, having acquired a 50 per cent stake at the time although Business News Australia is awaiting confirmation as to how that proportion has changed over time.
The family is behind Australia's largest vertically integrated fresh produce company Costa Group, a formerly listed entity which was recently sold to a consortium including the world's leading berry marketer Driscoll's for $1.4 billion.
GO.FARM's remit is to acquire and transform geographically diversified agricultural assets to deliver investors strong-risk adjusted returns. It is currently Australia's leading producer of field tomatoes and among the leading growers of almonds and farm grains, oilseeds, pulses, citrus and wine grapes.
Founder and managing director Liam Lenaghan says the Responsible Agriculture Fund provides an exciting opportunity for the investment community to capture the best of the opportunities present within this profound capital gap.
Despite farmland generating an 8.5 per cent compound annual growth rate (CAGR) over the past 20 years, and water entitlements delivering 6.7 per cent CAGR over 15 years, Lenaghan says “simply buying the market is not the path to real agricultural investment success or delivering positive impact".
"That requires deep domain expertise and a willingness to be deliberate in asset transformation to drive a step change in productivity, sustainable earnings and delivery positive impact withing regional and rural communities,” Lenaghan says.
“The feedback we’ve had from investors is that they’d like fund exposure where they can get four or five of our best ideas in one investment, giving them geographical spread across a number of climate zones, water sources and crop types. This is what the Responsible Agriculture Fund will deliver.”
While agricultural assets typically deliver operating returns between 7-9 per cent, GO.FARM has a proven track record of delivering transformational returns well above the standard threshold.
“We’re focused on excellence in execution,” says Lenaghan, “From team capacity and capability to acquisition behaviour and operational performance, we have dedicated agricultural specialists in all facets of the business. We’ve got the track record to support taking a fund to market and we’re thrilled to be finally bringing this offering to investors.”
LAWD senior director, Danny Thomas, regarded one of nation’s leading agribusiness transaction advisors, says the fund is being launched at the right time to attract investors ready to capitalise on opportunities in Australian agriculture.
“Australian agriculture is primed for investment, with best-in-class research, technology and farming practices producing high-quality, ethically produced food for global markets," he says.
“However, farm managers and operators also need to know what they’re doing. Good farming operators draw on specialist knowledge and expertise to identify assets with great potential for transformation to highest and best use, investing in technologies, infrastructure and commodities that will drive highest value returns.
“GO.FARM is a business that does this as well as anyone, and is ready to drive the growth our sector is capable of achieving."
