NBR | 7 March 2013
Canadian investment funds have big plans to become involved in Australian land, ports and other infrastructure projects, driven by food export potential.
The Canadian Pension Plan Investment Board has set up a team to examine opportunities.
Mark Wiseman, chief executive of the $A170 billion fund, will visit Australia this month amid the group’s expanding portfolio of interests across the Tasman.
Canada’s pension system has total funds of $A1 trillion. Other funds have also shown an interest in Australia.
Investors are being forced to search for higher returns outside the old northern hemisphere markets.
Mr Wiseman says he anticipates low growth in Europe and the US for years. He believes agriculture offers huge potential.
“Australia is one of the jurisdictions [where] we’re looking at the agricultural industry broadly, right from land on up through the infrastructure to support it, including things like ports,” he says in the UBS Global Leaders Insights Series on Sky News Business.
“We haven’t made any investments in that space in Australia yet but it’s certainly something we’re looking at.”
ANZ Bank has estimated that Australia, to take advantage of the export potential to meet the growing demand for food from the rising middle class in China and Asia more broadly, will require more than $A1.5 trillion in financing to the year 2050.
It says Australia and New Zealand could double the real value of agricultural exports by 2050, and that could mean up to an additional $A1.7 trillion (in 2011 dollars) in revenues over the next four decades if production increased and there was a shift to higher-value products.
Australia has fallen behind in agricultural reform and investment, while New Zealand has become the world’s largest dairy exporter, having seized the advantage of China’s growing thirst for milk and opened the doors for reciprocal investment.
“One of the things that’s most interesting about agriculture is, unlike the other resources, it’s obviously a renewable resource and there’s a certain attraction to being able to invest in the development of renewable resources like agricultural products,” Mr Wiseman says.
