agri_investor

by Chuck Stanley

24 NOVEMBER 2015 

Sustainable land and livestock investor SLM Partners is looking to raise $100 million to raise sheep in Chile’s Patagonia region.

SLM’s managing partner Paul McMahon told Agri Investor that a weak Chilean peso and the potential to double yields through innovative breeding and grazing methods are key drivers of the firm’s plan to invest in more than 100,000 hectares of Chilean pasture land.

McMahon said the firm plans to implement the ‘mob grazing’ technique used at SLM’s beef livestock operations in Australia. This is a high-intensity rotational grazing system where small paddocks of land host high volume ‘mobs’ of cattle or sheep for short periods of time followed by extended recovery periods. Enthusiasts of mob grazing point to testimonials and survey data from farmers who say the method improves soil and forage quality, while increasing livestock weight. The system will double the amount of sheep that can be supported on a given area of pasture, while rejuvenating degraded land, according to McMahon.

The sustainable aspect of the project is part of SLM’s commitment to the World Resources Institute’s Initiative 20×20, which aims to restore 20 million hectares of degraded land in Latin America and the Caribbean by 2020.

In addition to pasturing larger herds, SLM hopes to boost per-sheep profits by breeding Australian Multi-Purpose Merino rams with local breeds, resulting in sheep that produce finer wool at higher quantities, as well as heavier lambs. McMahon said Patagonian farmers have been successfully breeding the sheep for the past decade.

“We’re not trying to invent anything new,” he said of the higher-yielding sheep. “We’re just taking something that works and scaling it up.”

The farms will sell both wool and meat for sale to consumers in Asia, Europe and North America.

McMahon said plans for the investment remain “structure-agnostic” as the firm considers what sort of structure will best appeal to potential anchor investors.

McMahon said the firm is currently targeting a first close in mid-2016. The groundwork has already been laid for quick deployment of the fund, he added.

“We have the strategy. We have the team. We have the pipeline of assets and farms we can buy,” said McMahon. “We’ve got everything in place to move quickly.”

According to McMahon, SLM’s focus on sustainability is driven by the firm’s belief that recent innovations allow farms to achieve equivalent or better yields, while reducing risk and input costs, by working in concert with nature.

SLM Partners launched its first agri fund, SLM Australia Livestock Fund in 2012, and has raised more than $80 million in equity and debt for holistic grazing beef cattle operations on 480,000 hectares of land.