AIMCo Acquires Australia's Leading Corporate Grain Farmer

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AIMCo recently put out a press release on how alongside New Forests, it acquired Lawson Grains from Macquarie Asset Management: 

Alberta Investment Management Corporation (AIMCo), on behalf of certain of its clients, is pleased to announce that it has entered into an agreement to acquire Lawson Grains alongside partner New Forests, from the agricultural investment management business of Macquarie Asset Management. The agreement follows the successful conclusion of a public tender process.

Lawson Grains is one of Australia’s leading corporate grain growers, comprising a 90,500 arable hectare agricultural land estate across New South Wales and Western Australia. It is one of Australia’s largest grains and oilseeds businesses, producing over 200,000 tonnes per year of wheat, barley, canola and pulses. Under the transaction there will be no significant changes to the Lawson Grains management team in its Albury headquarters, or to current on-farm management, teams or living arrangements.

AIMCo has been investing in Australia alongside New Forests for more than a decade, primarily through Forestry Investment Trust, one of the largest hardwood forestry estates in Australia. Approximately 9,000 hectares of Forestry Investment Trust land in Western Australia has been converted to row crops since 2013. The Lawson Grains investment is a significant core-agriculture asset that adds crop, market, and climate diversity to the existing AIMCo Renewable Resources portfolio.

Ben Hawkins, Senior Vice President, Head of Infrastructure and Renewable Resources at AIMCo said, “AIMCo has a long history of making sustainable investments into Australia, on behalf of its clients. The opportunity to acquire Lawson Grains, a fully integrated grains business built on quality assets, people and systems presents an attractive opportunity for AIMCo’s Renewable Resource portfolio to add a significant core asset. We look forward to continuing the growth of the business through our longstanding partnership with New Forests, as good stewards of these high-quality agricultural assets.”

Mark Rogers, Senior Managing Director (Australia, New Zealand, US) at New Forests said, “Lawson Grains is a high quality and diversified agricultural business with an experienced management team. We look forward to working with the management team to continue to build the business and add value. New Forests will bring its sustainability approach to Lawson Grains, managing for sustainable agricultural production and natural climate solutions including soil carbon and native revegetation and focusing on community engagement. This investment is a natural extension to New Forests’ landscape management approach, ensuring integrated production across Australia’s varied landscape, and backed by our valued client AIMCo.”

Macquarie Asset Management Head of Agriculture, Liz O’Leary said, “We are delighted to have reached an agreement for the sale of Lawson Grains, which we are proud to have built on behalf of our investors over the past 10 years.

“This transaction demonstrates the natural evolution of agriculture as an increasingly mature and attractive alternative investment class. It provides a vote of confidence for investors regarding the opportunity to invest in agriculture businesses and ultimately realise the investments in the same way they are used to doing in other asset classes. Realising this successful investment will enable our business to look ahead to the next opportunity we can build for our investors.”

The completion of this acquisition is subject to Foreign Investment Review Board (FIRB) approval. All commercial terms are confidential.

About Alberta Investment Management Corporation

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $120 billion of assets under management. AIMCo invests globally on behalf of 32 pension, endowment and government funds in the Province of Alberta. AIMCo’s Timberland investment mandate started in 2005 and was expanded to include Agriculture in 2016, forming Renewable Resources.

About New Forests

New Forests is a global investment manager offering high-impact strategies in sustainable forestry and related sectors, with AUD 6 billion (USD 4.5 billion) in assets under management across 1 million hectares (2.4 million acres) of investments. New Forests’ investment portfolio consists of sustainable forest plantations, areas of natural forest conservation, carbon projects, rural land and row-cropping, and timber processing. New Forests’ vision is to see the forest sector as a key sector in the transition to a sustainable future. To achieve this vision, New Forests’ investment strategies support the role of forests as nature-based climate solutions, provide sustainable timber for the growing circular bioeconomy, and contribute to the sustainable development of regional economies and rural communities. New Forests is a Certified B Corp and operates in Australia, New Zealand, Southeast Asia and the United States. To learn more, please visit: www.newforests.com.au.

About Macquarie Asset Management

Macquarie Asset Management provides specialist investment solutions to clients across a range of capabilities including infrastructure and renewables, real estate, agriculture, transportation finance, private credit, equities, fixed income, and multi-asset solutions. As at 31 March 2021, Macquarie Asset Management had over $A562 billion of assets under management, with more than 1,900 staff operating across 20 markets in Australia, the Americas, Europe and Asia. Macquarie Asset Management has been managing assets for institutional and retail investors since 1980 in Australia and in the United States, retail investors recognise Delaware Funds® by Macquarie family of funds as one of the longest standing mutual fund families, with more than 80 years in existence. For more information, please visit macquarie.com. 

This acquisition of Lawson Grains, a high quality and diversified agricultural business in Australia with an experienced management team, is an excellent deal for AIMCo and its partner, New Forests.

It's not the only large Canadian pension buying farmland in Australia.

Canadian buyers have splurged more than $10 billion on Australian farmland and PSP Investments has been very active buying up farmland and other agricultural investments like water entitlements in the Murray-Darling Basin.

Interestingly, PSP has been on a multi-billion-dollar buying spree in Australia recently, spending a record amount for a WA dryland cropping operation and water rights in the lower Murray.

But today, I want to focus on AIMCo and  its acquisition of Lawson Grains, Australia's leading corporate grain farmer.

According to World Grain:

Lawson Grains produces more than 200,000 tonnes per year of wheat, barley, canola and pulses. Under the transaction there will be no significant changes to the Lawson Grains management team in its Albury headquarters or to current on-farm teams.

Lawson Grains will remain Australian-managed under its ownership. Headquartered in Sydney, New Forests is a global forestry investment manager offering high-impact strategies in sustainable forestry and related sectors.

Of course, I looked at New Forests website and was very impressed, it's a great partner to have on deals like this:

Founded in 2005, we offer institutional investors targeted opportunities in the Asia-Pacific region and the United States and have more than AUD 5.7 billion in assets under management globally. Our assets include sustainable timber plantations, rural land, and conservation investments related to ecosystem restoration and protection. New Forests focuses on managing our clients’ assets for a future in which landscapes will encompass both production and conservation values. New Forests manages approximately 1 million hectares of forests, rural land, and conservation investments and is headquartered in Sydney with offices in San Francisco, Singapore, and New Zealand.

New Forests’ investment strategies take into account a long-term view of economic and market trends and emphasise positive environmental, social, and development outcomes. We concentrate on buying well and then steadily adding value through productivity enhancements, market development, and a focus on commercial management.

Sustainable forestry investment in Australia and New Zealand.

Forestry investment in Australia and New Zealand offers access to mature timber markets, well-established forestry management systems, and new opportunities from increasing Asian demand for wood products. Investors can be exposed to Asian growth while investing in a stable, low-risk business environment. New Forests is the largest timberland investment manager in Australia and has operated in New Zealand since 2005.

Sustainable forestry in emerging markets of Southeast Asia.

Tropical Southeast Asia is an emerging market for sustainable plantation forestry investment by institutional investors. Our Southeast Asian investment strategy focuses on certified plantation forestry with an emphasis on technological and silvicultural improvements and a rigorous approach to environmental and social values and good governance. With an eye toward future growth, New Forests manages the first dedicated institutional timberland fund in Southeast Asia.

Conservation forestry and ecosystem restoration in the United States.

Forestry investment in the United States has evolved beyond traditional forest management to also encompass returns driven by conservation management strategies and the valuation of ecosystem services in growing environmental markets. New Forests’ US business focuses on strategies related to carbon forestry and conservation finance. We established the first institutional fund investing in both forest carbon and mitigation banking and have developed additional investment products that build on our track record.

You can learn more about which markets New Forests invest in here. 

Like I said, this is an excellent partner to have and I'm sure AIMCo has built a solid relationship with New Forests over the years.

In other AIMCo related news, it announced it entered into an investment management agreement with the Alberta Teachers’ Retirement Fund:

Alberta Investment Management Corporation (AIMCo) is pleased to announce that it has entered into an investment management agreement (IMA) with the Alberta Teachers’ Retirement Fund (ATRF). The agreement follows collaborative discussions between the parties to define how they can work together to ensure that AIMCo best serves the interests of ATRF and its members.

The new IMA clarifies the respective roles of ATRF — as the owner of the pension’s assets, with the fiduciary responsibility to protect and grow these funds — and AIMCo — as its agent, with discretion to apply its investment expertise within ATRF’s defined policy limits.

“Today’s agreement marks a point of departure for AIMCo as a multi-client investment manager. Our top priority is helping our clients to secure long-term prosperity for the people of Alberta they represent,” said Evan Siddall, AIMCo Chief Executive Officer.

“My colleagues and I will now devote our attention to a smooth transition of ATRF’s assets by December 31, 2021 so that we can help mind the retirement savings of ATRF’s most important constituent — Alberta’s retired and active teachers,” adds Siddall.

“We are pleased to have reached agreement on an IMA that will enable ATRF to continue providing the strategic policy direction for our plans’ investments, and establishes a strong framework which will enable AIMCo to implement ATRF’s strategic direction,” said Rod Matheson, ATRF Chief Executive Officer.

“We look forward to a constructive and collaborative relationship with AIMCo going forward.”

The IMA signed on September 3, 2021, takes effect immediately and follows the formal approval process of the Boards of Directors of both ATRF and AIMCo. It replaces Ministerial Order No. 42/2020, which has governed the investment management relationship between the two organizations since January 1, 2021. 

In a peculiar twist of events, the Alberta Teachers’ Association is claiming victory after reaching this agreement last week as it claim sit gets to keep full control of the investment strategies guiding teacher pensions:

The new investment management agreement between the Alberta Teachers’ Retirement Fund (ATRF) and the government-owned investment manager Alberta Investment Management Corporation (AIMCo) replaces a previous order quietly signed by Finance Minister Travis Toews in December.

In a Wednesday news release, the ATRF said the new agreement allows its board to maintain “control over the strategic investment policy for the pension plans’ assets and that AIMCo must implement that policy.”

The Alberta Teachers’ Association (ATA) said the new terms remove a clause giving AIMCo a veto over investments, and president Jason Schilling called it a “huge victory for teachers” in a Wednesday release.

“Teachers mounted a strong, wide-reaching, relentless campaign in defence of their pensions, which provided the ATRF with the backing they needed to negotiate an effective agreement that protects the interests of teachers,” said Schilling.

With Toews’ ministerial order no longer in force, the teachers’ association said it’s dropping its legal challenge, filed in March, that argued for the government decree to be thrown out by the courts.

It came after the UCP government’s Bill 22, implemented in November 2019, legislated the transfer of investment control of 82,000 practising and retired teachers’ pensions to AIMCo from ATRF by next December, along with control of three other large public sector pension plans.

Toews has said repeatedly that public sector pension boards, including the ATRF, would continue to control their own investment strategies and decisions. In January, his office said the order dictating AIMCo’s investment management agreement with the ATRF was a necessary, temporary measure.

I don't really understand why the Alberta Teachers' Association is "claiming victory" on this investment management agreement. 

The real victory is that AIMCo is now managing its assets, alongside those of many other clients, so who cares if they have veto rights on investment decisions?

But I did hone in to what AIMCo's new CEO, Evan Siddall stated in the press release:

“Today’s agreement marks a point of departure for AIMCo as a multi-client investment manager. Our top priority is helping our clients to secure long-term prosperity for the people of Alberta they represent,” said Evan Siddall, AIMCo Chief Executive Officer.

“My colleagues and I will now devote our attention to a smooth transition of ATRF’s assets by December 31, 2021 so that we can help mind the retirement savings of ATRF’s most important constituent — Alberta’s retired and active teachers,” adds Siddall. 

In my recent discussion on market manias with AIMCo's board member, Jim Keohane, he shared this with me:

On AIMCo, the thing that struck him is some governance issues which are "structural in nature."

What he means by that is at HOOPP and OTPP, it's basically one client (especially OTPP), so it's easier to set a common objective and focus. 

AIMCo doesn't just manage pension assets, it also manages the Alberta Heritage Fund, Alberta Treasury assets and a couple of endowment funds. This leads to some "structural complexities."

Also, following the VOLTS blowup last year, there's "more friction" between clients and AIMCo.

The job of managing all these relationships now falls on Evan Siddall, the new CEO who was appointed back in April and started working on July 1st.

Jim told me "Evan is a great change management executive" and "he has extensive government contacts." 

Indeed, his previous experience as CEO of CMHC will allow him to navigate all these relationships with clients and "refocus and get everyone in the same direction to achieve objectives." 

In my opinion, this is crucial, AIMCo's clients need to put the entire VOLTS blowup in the past, move forward and trust the Board and senior leaders who Jim thinks very highly of.

Lastly and most importantly, Evan Siddall posted this comment on Linkedin last week:

October 2 will mark a small miracle for me. I plan to ride 100 kms for the first time since this event last year. In any other year, I’d ride double that in a week. But last year triggered a crippling spinal stenosis that left me unable to walk. Two surgeries and patient — ok, not so patient — rehab later, I’m gratefully rebuilding my mileage.

We started the Growling Beaver Brevet following my diagnosis to help people with Parkinson’s to “Live Well Today.” The one-day event is also a celebration of cycling, a sport that has brought me great joy and lifelong friends. Please sponsor my ride or give generously to something meaningful to you.

I redistributed this post to my Linkedin network and asked people to donate to help Evan reach and surpass his goal of $50,000 to raise funds for Parkinson's, a chronic, progressive neurological disease that affects many Canadians, including himself. 

[Evan has almost reached his goal, please make sure you donate here.]

Of course, being the ignoramus that I am, I had no idea Evan was diagnosed with early onset Parkinson’s disease in 2015, and is an advocate for healthy living. 

Inspired by the legendary cyclist Davis Phinney’s mantra to “live well today,” Evan is a member of Davis’s foundation board and co-founded the Growling Beaver Brevet cycling fundraiser. 

I thank Dénes Nemeth, Vice President Corporate Communications & Public Affairs at AIMCo, for talking to me earlier and explaining me all this (I had no idea). 

I'm also glad Evan is doing better and able to ride his bike and hope they have great weather to enjoy this year's fundraiser.

I also think it's amazing that he takes the time to be an advocate for Parkinson's and shares so many resources publicly:

I know a little about this disease as the fathers of two close friends of mine have it (and I know of many more), but I know a lot more about Multiple Sclerosis as it's been a little over 24 years since I was first diagnosed.

I'm not going to sugarcoat it, these neurological diseases are tough, some days are a lot harder than others (many hidden symptoms, not just visible ones), which is why you need to live healthy (proper sleep, diet, exercise, etc), share a laugh with friends and family and surround yourself with the right people.

But dealing with a chronic neurological disease for so long teaches you humility, resilience and patience. I often joke with my friends: "I know all about what getting really old means, I've felt it firsthand, so when my time comes, I'll embrace it like a long lost cousin you get reacquainted with."

Anyway, I look forward to meeting Evan one day and sharing some laughs and experiences with him.

Below, learn all about Lawson Grains and why it's a great acquisition for AIMCo and its members.

Second, learn about Australia's New Forests and why it's a great partner to have in sustainable forestry.

Lastly, 9 News Australia reports there's new hope for Parkinson's sufferers in the form of light therapy, with a clinical trial showing an improvement in the symptoms of participants.

Pretty cool stuff, I wonder if it works in other neurological diseases. 

Let me wrap it up there. Please remember to support Evan's fundraising activities here. Thank you!

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