AIMCo and New Agriculture Acquire Australia's Kimberley Cattle Portfolio
Alberta Investment Management Corporation (AIMCo) and New Agriculture have bought a large-scale cattle breeding business in the Kimberley region of Western Australia in a transaction IPE Real Assets understands to be worth around A$300m (€181m).
The pair announced the acquisition of the 3m-hectare Kimberley Cattle Portfolio from Chinese investor Shimao Group, without disclosing financial details.
As part of the agreement, Haydn and Jane Sale will be retained as managers of the Kimberley Cattle Portfolio.
This is the second significant acquisition by AIMCo, which bought the mixed farming business, Lawson Grains, in January 2022 for around A$600m.
AIMCo, one of Canada’s largest institutional investment managers, has invested in Australia for many years, firstly in forestry with New Forests, which created a division, New Agriculture, last year to both manage Lawson Grains and to build a portfolio of agriculture assets globally, starting in Australia and New Zealand.
Ben Hawkins, executive managing director, and head of infrastructure and renewables resources at AIMCo said: “The Kimberley Cattle Portfolio, AIMCo’s first investment in this sector, is an established and well-managed asset that provides important diversification in our client portfolios.”
Bruce King, director of New Agriculture said: “Kimberley Cattle Portfolio offers a key opportunity to manage for strong investment outcomes alongside leading sustainability objectives.
“With up to 25% of the solution to climate change expected to come from the land use sector, we have a responsibility to manage these landscapes for sustainability outcomes, and with our local communities in mind.”
Private Capital Journal also reports on the deal:
The Alberta Investment Management Corporation (AIMCo) and its investment partner New Agriculture, have entered into an agreement to acquire the Kimberley Cattle Portfolio (Yougawalla Pastoral Co and Argyle Cattle Co).
The agreement follows the successful conclusion of a public tender process. Financial details of the transaction are confidential.
The transaction is subject to Foreign Investment Review Board approval in Australia and approval by the Western Australia Lands Department; both are expected to be completed by the first half of 2024.
The Kimberley Cattle Portfolio is a large-scale cattle breeding business that spans almost 3 million hectares in the Kimberley region of Western Australia. The portfolio consists of seven pastoral leases (1,828,692ha), and five sub-leases (924,325ha), as well as an agistment agreement over 153,475ha.
The assets are being sold by Australian and Chinese citizen and billionaire Hui, Wing Mau (Xu, Rongmao), the founder and head of Hong Kong based property group Shimao Group Holdings.
In 2017, Hui acquired the Bulka, Yougawalla, and Margaret River stations and 45,000 head of cattle in Western Australia for approximately AUD $70 million or US $44.36 million, and the Argyle Cattle Co. for approximately AUD $120 million or US $76.04 million.
New Agriculture is an agriculture investment manager headquartered in Australia, established to both manage Lawson Grains and to build a portfolio of agriculture assets globally, starting in Australia and New Zealand. New Agriculture is backed by New Forests, a global investment manager of nature-based real assets, which was formed in 2005.
As part of the agreement, Haydn and Jane Sale will be retained as managers of the Kimberley Cattle Portfolio.
Earlier today, AIMCo issued this press release announcing that along with New Agriculture, it will acquire the Kimberley Cattle portfolio:
The Alberta Investment Management Corporation (AIMCo) and its investment partner New Agriculture, today announce an agreement to acquire the Kimberley Cattle Portfolio (Yougawalla Pastoral Co and Argyle Cattle Co). This agreement follows the successful conclusion of a public tender process and is subject to regulatory approvals.
The Kimberley Cattle Portfolio is a large-scale cattle breeding business that spans almost 3 million hectares in the Kimberley region of Western Australia. The portfolio consists of seven pastoral leases (1,828,692ha), and five sub-leases (924,325ha), as well as an agistment agreement over 153,475ha.
AIMCo is one of Canada’s largest institutional investment managers, which invests globally on behalf of pension, endowment, insurance, and government funds in the Province of Alberta, Canada. AIMCo has invested in Australia for many years, firstly in forestry and most recently in agriculture through the acquisition of mixed farming business, Lawson Grains in January 2022.
New Agriculture is an agriculture investment manager headquartered in Australia, established to both manage Lawson Grains and to build a portfolio of agriculture assets globally, starting in Australia and New Zealand. New Agriculture is backed by New Forests, a global investment manager of nature-based real assets, which was formed in 2005.
Ben Hawkins, Executive Managing Director, Head of Infrastructure & Renewable Resources at AIMCo said: “The Kimberley Cattle Portfolio, AIMCo’s first investment in this sector, is an established and well-managed asset that provides important diversification in our client portfolios. We are very pleased to continue our partnership with New Agriculture, which will contribute its deep asset management and sustainability expertise as we seek to achieve both positive investment returns and community impact.”
Bruce King, Director of New Agriculture said: “Kimberley Cattle Portfolio offers a key opportunity to manage for strong investment outcomes alongside leading sustainability objectives. With up to 25% of the solution to climate change expected to come from the land use sector, we have a responsibility to manage these landscapes for sustainability outcomes, and with our local communities in mind. Our intention is to apply the same level of rigour and commitment to sustainability that New Forests has in the forestry space to the agriculture sector. New Agriculture will continue to focus on sustainability practices which allow for not only the protection and restoration of landscapes, but which also lead to the enhancement of natural capital over time.”
As part of the agreement, Haydn and Jane Sale will be retained as managers of the Kimberley Cattle Portfolio.
Financial details of the transaction are confidential. The transaction is subject to Foreign Investment Review Board approval in Australia and approval by the Western Australia Lands Department; both are expected to be completed by the first half of 2024.
About AIMCo
AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than CAN$158 billion of assets under management. AIMCo invests globally on behalf of 17 pension, endowment, insurance, and government funds in the Province of Alberta. AIMCo manages approximately 30 pools of capital on behalf of these clients. With offices in Edmonton, Calgary, Toronto, London, Luxembourg, and Singapore our more than 200 investment professionals bring deep expertise in a range of sectors, geographies, and industries. For more information on AIMCo follow us on LinkedIn.
About New Agriculture
Headquartered in Australia, New Agriculture was established in August 2022 to both manage the Lawson Grains aggregation, which was acquired by New Forests and Alberta Investment Management Corporation (AIMCo) in January 2022, and to build a portfolio of agriculture assets globally, starting in Australia and New Zealand.
New Agriculture has A$1 billion in assets under management across 130,000 ha and is part of New Forests, a global investment manager of nature-based real assets (with total assets under management of A$11 billion). New Agriculture’s objective is to manage these assets for market leading investment returns through sustainable agricultural production while also aligning with New Forests’ strategic impact objectives to contribute to nature-based solutions, shared prosperity, and the circular bioeconomy. For further information please visit www.newagriculture.com or follow us on LinkedIn.
I'm going to try keeping my comments very brief.
Yesterday, I discussed why OTPP entered into a strategic partnership with Australia's Montague, noting this:
Agricultural investments in Australia are a hot area of activity as Canadian pension funds grapple with the possibility rates will stay longer for higher.
Australia is well situated to export fruits, vegetables and wines throughout the Asia Pacific region.
For example, Australia's finest wine and food is being exported to South Korea which is the latest target in a new united campaign that brings together some of Australian agriculture's biggest RDCs and industry organizations to open new export market opportunities in Asia for farmers and food producers.
This is why PSP Investments has grown its operations there significantly over the last decade and OTPP is following suit.
Agriculture isn't for everyone, you need to partner up with experienced people who know what they're doing and in this case, it's clear Motague is a leader in this industry.
I think pension funds in Canada are following PSP's lead, building out their agriculture portfolios in Australia where there are great opportunities to partner up with experienced operators.
Note, as part of the agreement, Haydn and Jane Sale will be retained as managers of the Kimberley Cattle Portfolio.
AIMCo has established New Agriculture to both manage Lawson Grains and to build a portfolio of agriculture assets globally, starting in Australia and New Zealand.
Why Australia? Why not Canada? There are opportunities here too but not at the scale of Australia and you don't have direct access to Asia here, so it makes sense to build out their agricultural portfolios there first.
I bring this up because AIMCo CEO Evan Siddall wrote an op-ed for the Globe and Mail stating the federal government government should not be pushing pension funds to invest more in Canada.
He has also stated that AIMCo invests a huge chunk of its assets in Canada but is now looking to invest globally to properly diversify its portfolio by geography and sector.
What AIMCo, OTPP, PSP and CDPQ are doing is building out their agriculture portfolios to hedge against inflation risks and to capture growth in Asia.
It's also part of their sustainable investing focus.
In fact, earlier this year, AIMCo's Jonathan Braams discussed how climate change and inflation are impacting agricultural investments, noting this:
“I think one of the biggest things we realized is, when we buy land investments, we don’t necessarily need to restrict ourselves to either just doing trees or just doing crops,” says Jonathan Braams, manager of the organization’s infrastructure and renewable resources portfolio.
“We saw the benefit of total landscape management — you plant what’s most suitable based on the soil types [and] the topography of the area, the climate zones and even the microclimates within some of these larger properties that we bought.
“We found that agriculture had a lot of the same characteristics of timberland, but was a little bit different at the same time — we love timberland because we found that big land-based holdings had very good inflation protection.”
...
The AIMCo’s agriculture investments in Western Australia and New South Wales have provided substantial diversification, says Braams, noting the two regions represent different markets and purposes. “Western Australia is primarily an export-oriented market for grants and then New South Wales is primarily domestic customers. [These properties are also] within five different climatic zones with different rainfall patterns, so there was diversification because of the significant geographic spread.”
That covers the background and why AIMCo wisely chose to acquire the Kimberley Cattle Portfolio.
Below, Kimberley Agricultural Investments General Manager Jim Engelke says his company set out to evolve a “diversified and scalable” development in order to be globally competitive:
“When I say scalable … we have to be globally competitive, so if we’re not globally competitive as an ag-base then we’re not going to be around very long,” he said to The Australian’s Managing Director John Lehmann.
“How we did that, and how we’re doing that – so we’ve been operating now ten years developing land, it’s been a bit of a slow burn but we’re beginning to pick up of pace.”
And video showing life on a cattle station in the Kimberley, Western Australia. Bull catching , mustering and more.
Looks pretty cool if you ask me, but I'm a huge Yellowstone fan and love John Dutton. :)
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