At Prime Value we believe efficiency, sustainability and reliability are critical core values for agribusiness success, as is the delivery of a trusted and quality product. The Fund investment team seeks out investment opportunities in farms and agribusinesses that represent these core values and investors will gain exposure to Australian agricultural businesses that are poised to benefit from the growing demand for Australian produce.
The Fund will invest in:
- Listed and unlisted agricultural businesses including agricultural logistics and infrastructure; and
- Agricultural technology.
The Fund investments will comprise of a combination of direct land ownership, private equity and ASX or other exchange listed equity. The Fund is also mandated to invest in debt, convertible notes, production royalties and options. All money pending investment is held in cash.
Farmland Investment Strategy
The investment team will focus on medium to long term direct and indirect farmland investment opportunities where value can be added in the medium to long term. It will target investments:
- where farms have been mismanaged or under-resourced and turnaround opportunities are evident;
- where there is potential to aggregate a number of properties to increase the overall productive capacity;
- where increasing demand for the produce is projected or where a change in the crop or land use can increase production and value;
- where there are joint venture opportunities with industry associates to enhance the value of land assets. This may include investment in facilities to improve logistics, the management of water rights and regional off-take agreements.
The Fund will diversify its farmland exposure regionally and across crops. Farmland opportunities are currently being reviewed in hay, citrus and dairy production.
Agribusiness Investment Strategy
Agricultural investments will not always involve holding farmland directly but will also involve holding equity and debt in listed and unlisted agricultural businesses.
Our investment team focuses on:
- Investing in or acquiring businesses that are undervalued relative to market valuations (examples include businesses that have been constrained by insufficient investment capital; where there has been sub-optimal use of an asset where opportunities to beneficially re-structure exist);
- Small to medium sized businesses with strong growth potential;
- Participating in transactions that are not offered widely to the market and where terms to suit the risk profile of the Fund can be negotiated;
- Working with our industry associates to combine our knowledge and expertise in financial structuring and management with their knowledge and expertise in managing the underlying business.
Agricultural Technology Investment Strategy
According to the UN Food and Agriculture Organisation between now and 2050 the world’s food system will need to produce 70% more food to meet the needs of the growing global population. In the face of shrinking land and water resources this must come from productivity growth in the form of improving yields and improving the management of existing land resources. Innovation and new technologies are crucial to raising agricultural productivity growth and a small proportion of the portfolio will be devoted to the agricultural technology sector.