Maximising agriculture investments with real assets

A key part of our food and agriculture strategy is investing in real assets and pairing them with the best management teams. Managing Partner Brad Mytton and Partner Frank Barillaro discuss implementing value-added strategies through operational improvements, acquisition opportunities, development initiatives, and others to drive alpha.

Frank Barillaro: Brad, a key focus of our strategy is investing in real assets. Food and agriculture allows you to invest in tangible things, things that you can touch and that you can feel and things that underpin valuation and a basis for your investment. Can you talk a bit more about the real asset strategy and the opportunities you see here in Australia over the next twelve to twenty-four months?

Brad Mytton: Yeah, certainly. So, some of the investments that we've already made significant a real asset base. So, I think about Flavorite, the largest class house operator in the country, StoneAxe wagyu is one of the largest full blood wagyu herds in the world now. I think about ProTen, our broiler chicken business that you mentioned earlier, Pace Farm our tree nut platform, Lachlan River Almonds for example. All great examples of that real asset mindset, and our desire to own and operate those. The strategy really revolves around how do we take those operating real assets, and looking to pair those with the best management teams, in the country. So really finding the best asset paired with the best management teams and looking to bring some of that private equity approach to the food and agriculture sector.

So that's been the story historically and we'll continue into the future, when we start thinking about returns and how they sort of overlay with the strategy really looking to run those real assets for a standard return that might be a low team style return, just running those target assets we think there's operational value add, be that through, acquisitions that are accretive multiples or development activities in relation to greenfield brownfield expansion and the like. That gets us up into the sort of high teens returns with relative consistency. And then really looking for buying well, selling well. Those other multiple arbitrage, bit of debt, these types of things to really put us into the twenty sort of returns, which lines up with how we've been performing historically.