SLM Australia Livestock Fund holds First Closing at AU$75 million
JUNE, 2015. The SLM Group is pleased to announce the first closing of its SLM Australia Livestock Fund (“the Fund”). The Fund will acquire and operate pastoral farmland in Australia, primarily for cattle production. Its strategy is built on implementation of an innovative grazing system that is expected to improve productivity while enhancing the environment. PKA, one of the largest pension fund groups in Denmark and a leading investor in the farmland asset class, has committed AU$75 million to the Fund.
“Australia has many advantages for livestock production,” said Jens Henrik Staugaard Johansen, Managing Partner of PKA Alternative Investment Partners. “It has a stable regulatory environment, disease-free herds and is well-positioned to serve Asia’s growing demand for meat. The country has large areas of pastoral land that can be grazed year-round. This means it is especially suited to grass-fed beef production, which is less exposed to volatile input prices than grain-fed systems. We are excited about the SLM fund because it will capture this opportunity in a sustainable way.”
The Fund plans to acquire farming properties in Australia and to implement an ecological grazing system that can improve soil health, increase herd size, lower costs of production and strengthen resilience to extreme weather events. By storing more carbon in soils, it is also expected to reduce the greenhouse gas emissions often associated with raising cattle. In November 2011 this grazing system was selected by the Virgin Earth Challenge as one of the top 11 commercial ideas for taking greenhouse gases out of the atmosphere.
“The business of agriculture is the capturing, packaging and marketing of sunlight energy for a profit”, said Tony Lovell of the SLM Group. “Rather than relying on expensive inputs, our management will make the most of the natural relationships between soils, grasses, and grazing animals. This understanding of biology is what drives economic returns.”
The Fund will be managed by the SLM Group, which has offices in Australia and London. The SLM Group believes strongly in the future of Australian agriculture, and is committed to making a positive and long term contribution to genuinely sustainable primary production. The SLM Group is working with Kronstein Alternative Investment Advisors, an independent consulting firm focused exclusively on the alternative asset classes.
“We are already in advanced due diligence on a number of properties and expect to make the first purchase in the next three months,’ said Paul McMahon of the SLM Group. “At the same time, there is strong interest in the Fund from other institutional investors.”
A final closing of the Fund is expected by the end of this year. The target fund size is AU$300 million.