From time-to-time, the Directors of WADEmathesonTM identify opportunities to invest private equity in small to mid-sized Australian companies or funds with identified potential to increase investor value. Generally, these opportunities have strong leadership, sound intellectual capital resources and unique value propositions. These are backed by tangible assets including agricultural or commercial property. While WADEmatheson does not hold an Australian Financial Services Licence (AFSL), it refers to the services of boutique investment banks focused on Australian Equities. These institutions can provide independent corporate advice and trading services necessary in a dynamic market place.
Presently we are supporting two major new investment funds in the agri-land space. Both are managed by appropriately licenced fund managers, both hold land and water assets and receive a rental income return which delivers an annual yield of about 4% per annum, paid quarterly.
One holds land and rents it to proven family scale farming operators, primarily in the Australian beef cattle and cropping sector. Annual capital growth is expected to be around 6% per annum in addition to the yield. This fund is raising a total of AU$300M with first close of $80M.
The other fund we support will acquire agricultural land presently underutilised and consequently undervalued. This fund will redevelop the land to higher and better uses and then rent it to farming businesses in the beef, lamb, dairy, cropping and horticultural sectors. This fund is raising about AU$50M now as it makes acquisitions and begins redevelopment of more than 25,000 Ha in the next 12 months. Returns are expected to be around 4% yield and annualised capital growth of 7% with one-off redevelopment value uplift approaching 20%.