DANISH pension fund Pensionskassernes Administration (PKA) has backed the purchase of $60 million worth of Queensland cattle stations through local operator Sustainable Land Management Partners.
The 480,000 hectares of country, from Blackall to Cunnamulla, will be held in the SLM Australia Livestock Fund and will be managed by SLM Partners, which has an office in London.
SLM Partners director Tony Lovell told The Australian Financial Review that the SLM fund is looking to expand even further. "We are in the final stages of bringing in another $30 million of blended equity and debt from a global insurance company," Mr Lovell said.
Colliers International's valuation team is advising the potential investor.
"There are plenty of good properties out there and there are plenty of people who want out but can't," Mr Lovell said.
The fund raised $75 million from PKA in its first closing in June 2012 and is promising investors a return after fees of 12 per cent. "PKA are very patient long-term investors with a 20 to 30-year approach," Mr Lovell said. "We have had some discussions over the past couple of years with a few Australian institutions, and would heartily welcome an Australian investor into the fund."
SLM Partners has kept a low profile as it aggregated collections of properties into "hubs" in areas near Cunnamulla, Quilpie and Blackall. Cunnamulla includes the 43,000ha Padua Park hub purchased for $10 million; the 49,000ha Willacora hub for $9.3 million; the 71,000ha Eureka Plains for $7.4 million; the 48,000ha Amenda and the 79,000ha Garrawin for $11.8 million and $4.3 million respectively.
At Quilpie, SLM put together the 165,000ha Colac hub for $6.4 million while at Blackall it has the 25,000 ha Listowel Downs for $11.2 million.
SLM Partners started in 2007 when former Citi employees, who were hatching a plan for a separate fund, joined Mr Lovell and the late Bruce Ward of Colly Farms. The concept behind SLM Partners' management is about trying to bring the land and cattle back to a more natural state. "Nature has big herds, constantly moving and kept bunched up, whereas humans have had little herds, all spread out in the same area for a long period of time," Mr Lovell said. The smaller area cattle have to travel the more weight they put on so better prices when sold.
SLM can pinpoint the location of cattle on any of their properties at any one time with each property divided into miniature, well-watered paddocks.
"What we are doing is in no way a criticism or comment on how any other farmer or grazier is operating or has operated their business.We are simply trying something a bit different.
"In particular if any of the properties we purchased have had less than stellar improvements we very clearly recognise and fully respect that their previous owners have always faced competing demands on their scarce resources," Mr Lovell said.