Agricultural investment and management outfit, AAM, has received strong backing from mum and dad investors wanting to put money into its latest venture - a mixed farming aggregation in NSW and 10 million chooks in South Australia.
Brisbane-based AAM Investment Group, best known as the managers and operators of the Regional Livestock Exchange Portfolio, has just raised more than $60m for a new diversified agriculture fund.
The fund will invest in a mix of large scale farming business across Australia.
RLX runs eight supersized regional selling centres from Ballarat in Victoria to Rockhampton in Queensland, which are owned by infrastructure development group, Palisade Investment Partners.
AAM has also been buying and managing farmland investment portfolios for the past two years, with earnings delivering average returns of about 7.5 per cent on investors' money.
It is now in the throes of buying the Sunshine Farms aggregation - three properties in the Lachlan Valley, about 30 kilometres down river from Forbes.
It is also merging four family poultry growing operations at Murray Bridge in SA under the Murray Bridge Poultry name.
Investors are telling us this asset class has been difficult to access in the past
Its new diversified agricultural fund will expand its enterprise mix as opportunities allow during the next two years.
The Forbes cropping and livestock properties include water access rights which have not been fully developed, and opportunities to upgrade production capacity or expand to other holdings in the district.
AAM already has a poultry investment at Blanchetown in SA, where its Riverlands Free Range farm grows another 10m chickens under contract to poultry processor, Inghams.
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The investment group's asset base, in four separate agricultural funds, now totals about $260m.
The portfolio includes the 1800 square kilometre Legune Station in the Northern Territory's far north west, acquired a year ago, and a sawmill at Bathurst in NSW.
Legune, which runs about 32,000 cattle, is also the base for a prawn farming venture run by listed aquaculture business, Seafarms Australia, which has leased land on which production tanks are being established.
AAM Investment Group managing director, Garry Edwards, said the level of investment interest from individuals, self managed super fund owners and private wealth investors highlighted the appeal of agricultural assets, particularly for a diverse spread of agricultural commodities coverage over a wide geography.
Responses to the latest fund offer were all from Australian investors, including existing AAM investors.
Despite serious drought conditions across many parts of rural Australia, support exceeded expectations.
"Those investors are telling us this asset class has been difficult to access in the past," Mr Edwards said.
"We are simplifying it by having one diversified fund across several mainstream agricultural sectors."
AAM's focus on precision farm management, sustainable practices and renewable energy technologies would enable it to enhance operations "and do more with increasingly scarce resources".
It would support sustainable, integrated operations in the chicken, beef and lamb sectors, plus cereal grains and plant proteins.
Southern portfolio manager with the diversified fund, Nathan Morris, who lives in the Forbes district, said feedback from AAM's investors was supportive of the company's active, on-the-ground management style.
AAM's investment pipeline was significant, and critical scale and further diversity in the new fund would build quickly.
Mr Edwards said conveniently a $650m federal and state government commitment to increase the water holding capacity of Wyangala Dam upstream on the Lachlan River would reinforce the reliability of supply to the Sunshine aggregation.
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The story Regional saleyards management group AAM buys more farmland first appeared on Farm Online.