AAM's diversified agriculture fund acquires Terrick Station as cornerstone asset
Global AgInvesting| 9 April 2020
AAM's diversified agriculture fund acquires Terrick Terrick Station as cornerstone asset
By Lynda Kiernan
AAM Investment Group has confirmed that it has completed an off-market deal to acquire Terrick Terrick, a 55,000-hectare (138,000 acre) property from long-time owners Russel Pearson and the Pearson family, for an undisclosed amount.
Located in the Blackall region of Queensland, Terrick Terrick will be the foundation on which AAM’s Diversified Agriculture Fund builds out its beef holdings, which are expected to account for 40 percent of the fund’s allocations.
AAM Investment Group announced the launch of its AAM Diversified Agriculture Fund in November 2019, representing the fourth agricultural fund for the Brisbane-based investor with a goal to develop a diversified range of sustainable agricultural assets spanning the main protein categories of beef, poultry, and lamb, alongside plant protein and cereal grain assets.
In November, the fund stated that after the turn of the year, intentions were to undertake further fundraising to support the acquisition of complementary premium agricultural assets that will be a balance of income-style and strategic investments that will serve to diversify the existing portfolio that already includes:
~ Southern Cross Poultry Fund: a holder of a large-scale poultry farming infrastructure facility in South Australia producing more than 10 million chickens per year. The initial capital raise, which exceeded expectations, enabled the addition of 48 sheds, which lifted production to 20 million chickens per year across South Australia.
~ Pastoral Development Trust: holder of the 178,870-hectare Legune Station, a large-scale cattle station in the Northern Territory with carrying capacity of 33,034 head, a 35,100 megaliter dam (the largest privately-held dam in the country), and access to an additional 106,400 hectares of licensed productive land.
~ And the Sustainable Softwood Trust: holder of a stand-alone softwood saw milling facility in New South Wales processing 92,000m3 of raw material per year, with development approval for 210,000m3.
“We’re really focussing on the key food commodities that are in significant demand,” Garry Edwards, managing director, AAM Investment Group, told Beef Central. “There’s a chicken thematic around low-cost protein; a beef/lamb protein thematic; and mixed farming to balance the portfolio.”
Over the past two decades the Pearson family used Terrick Terrick as a growing property, and have over that time converted the operation to Certified Organic beef production. And although no cattle were included in the sale, the property is estimated to run 10,000 head of backgrounder cattle per year.
“We had been looking around the Blackall region for at least three years, trying to find the right asset of scale to fit what we wanted to do, in our broader beef supply chain,” AAM Investment Group’s Managing Director Garry Edwards told Beef Central.
Building upon the Terrick Terrick holding, AAM stated that it has a number of complementary asset acquisitions in its sights, including large-scale breeding operations surrounding the Blackall region, and will also consider the future acquisition or partial investment in feedlots.
“We’re looking for quality assets that we can further invest in, over a seven to ten year period,” said Edwards. “In essence, we will be trying to increase the total size of the Diversified Agriculture Fund by four to five times what it starts off with. That would mean a total asset value of at least $600 million over the next five years.”
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