MACQUARIE Group's agricultural division has launched a new cropping fund that will buy large-scale grain properties in Australia and Brazil.
Macquarie has been low-key about its target for the fund, but investors approached by the group said it might seek to raise as much as $US600 million ($672 million).
The launch of the fund, as foreshadowed by The Australian Financial Review, comes as the deregulated Australian grain industry faces major consolidation after Canadian giant Viterra's $1.6 billion acquisition of ABB Grain last year, and the recent takeover offer for AWB by GrainCorp.
Macquarie Agricultural Funds Management division director Simon Aboud confirmed the fund was under way, and an initial close was likely later this year.
The fund, named Macquarie Crop Fund, will purchase cropping country across Australia and Brazil based on the availability of scale and geography.
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AAP | August 16, 2010
Macquarie launches new crop fund
Macquarie Agricultural Funds Management, which is part of investment firm Macquarie Group, has launched a new crop fund focusing on grain and oilseed production in Brazil and Australia.
The fund will purchase or lease, and operate farms in Australia and Brazil growing soy, corn, wheat, canola, barley, sorghum, pulses and cotton.
"The fund aims to provide investors with ongoing income generated by the sale of the produce and capital growth returns through ownership of the land and increasing land values," Macquarie said in a statement on Monday.
"The increasing demand for grains and oilseeds comes from a number of areas, including providing a source of food to meet the demands of a growing population, changing dietary habits which are seeing a move from lower-value staple grains to higher-value foods such as vegetable oils and meat, the increasing need for animal feed supplies and ongoing demand for industrial goods such as building materials."
Macquarie said Brazil and Australia were chosen for their climate, availability of large properties, mature agricultural industries and access to overseas markets for exporting produce.
