Global AgInvesting Media | 7 December 2021
Rural Funds Management acquires Kaiuroo aggregation from the Rohatyn Group
By Lynda Kiernan-Stone
Rural Funds Management (RFM), manager for the ASX-listed Rural Funds Group (RFF), an owner of a diversified portfolio of high-quality Australian agricultural assets, has had an impressive few months, rapidly acquiring multiple assets spanning cattle, cropping, and macadamia production – and they’re not done yet.
The Rohatyn Group (TRG), a New York-based asset manager with expertise in forestry, agriculture, and emerging markets, announced it had completed the sale of the Kaiuroo aggregation to RFM for an undisclosed sum.
Situated in Queensland, Australia, Kaiuroo consists of four contiguous properties including 24,000 hectares of grazing land for approximately 5,000 head of organic and non-organic, grass-fed cattle, and more than 4,000 hectares of cropping land from which more than 1,400 tons of wheat, and nearly 1,000 tons of chickpeas were harvested in 2020.
Ian Holly, partner with TRG, noted that since purchasing Kaiuroo out of receivership in 2013, TRG has implemented rotational grazing and the resting of cattle land to promote the development of desirable perennial grass species, and has undertaken no-till cropping methods to conserve moisture and provide ground cover.
“Mixed-use properties such as Kaiuroo are ideal candidates for TRG’s agriculture strategy,” said Nick Rohatyn, CEO, TRG. “Remaining agnostic to geography and product type can allow us to invest opportunistically in undercapitalized and underutilized farmland that offers significant scope for value improvement across a number of dimensions.”
Originally, it was the opportunity for improvement and the chance to upgrade Kaiuroo’s quality via the development of irrigation and improved pasturelands that drew TRG to the aggregation, and they are certain that this momentum will continue under RFM ownership.
“We are excited by the current market landscape for agricultural and horticultural investments that have scale, and significant potential for further investment and improved environmental outcomes,” said Rohatyn.
It was only last month that GAI News shared that RFM had snapped up a collection of cattle, cropping, and macadamia assets in central and southeast Queensland for a reported total of A$110 million (US$80.6 million). To generate immediate income while these projects are under development, RFM acquired Beerwah and Bauple – two mature macadamia orchards totaling 475 hectares from Costi Farms for A$63.1 million (US$46.2 million), which includes shares in Marquis Macadamias – a processing and marketing company – expected to close in December 2021.
In separate deals, RFM also agreed to acquire The Pocket – a 1,917-hectare cattle property with 5,364 megaliters of water allocations (adjacent to RFM’s 7,600-hectare Comanche property) that was part of the recently sold THF Portfolio of cattle and irrigated fodder properties.
And finally, there’s Baamba Plains – a 4,130-hectare cropping property north of Rolleston in Queensland, that together with The Pocket has 20,733 megaliters of underutilized water entitlements that RFM plans to leverage to improve productivity before seeking out interested lessees.
Activity such as this is good to see after a challenging and distracting period for RFM. In February 2020, the Supreme Court of New South Wales found in favor of the publicly-traded agricultural investor against U.S.-based activist short seller Bonitas Research, finding that claims made by Bonitas against Rural Funds were misleading and false.
The decision handed down by Judge David Hammerschlag against Bonitas was damning and clear. Finding that Weichert and Bonitas violated sections 1041E, 1041F and 1041H of the Corporations Act, as well as section 12DA(1) of the ASIC Act.
Now, however, RFM is back to the business of ag investment and asset management in a big way, and it’s good to see.