The Permanent Crop Partnership Fund is being run by Craigmore Sustainables, a NZ company investing in long-term partnerships with food and fibre producers.
The money will be used to develop wine grape vineyards and kiwifruit and apple orchards in Gisborne, Northland and Central Hawke’s Bay.
Most subscribers are from overseas and subject to Overseas Investment Office scrutiny but show food production remains a desirable investment, Craigmore chief executive Che Charteris said.
Criagmore’s investment model differs from others targeting the primary sector by ensuring local decision-making, being long term, adhering to sustainable standards and being across multiple industries.
Its latest offering is typical of the way Craigmore operates.
The investment will be for 10 to 20 years and primarily go on buying land, trees, vines, buildings, equipment and processing and marketing assets with most orchards to be greenfield developments from pastoral or arable farms.
“We are rapidly approaching the target with the majority of the funds already allocated to assets under contract for purchase.”
Previous investments have been alongside an equity partner-manager and allowed that business to grow.
Charteris said investors must accept decisions are made by local managers and the businesses governed by NZ-based directors.
“It is all about trying to create local decision-making because farming assets have community impacts,” he said.
The model is attractive to investors seeking more than just a financial return.
Investors must also accept an underlying sustainability philosophy of making the right use of the right land, allowing public access where appropriate and environmental measures such as riparian and forestry planting for water quality and to offset carbon emissions and protect biodiversity.
Before land is bought a farm environment plan is prepared and ecological surveys done.
“It sets a very high bar but it aligns with the business we want to build,” “Charteris said.
He is reluctant to talk numbers saying there are more relevant measures but said Craigmore has a diverse portfolio.
It includes 90ha of kiwifruit with plans for 100ha of greenfield development, 100ha of production apple orchards with up to 400ha planned, more than 800ha of pumpkins cropped each year for export to Japan, Korea and China, almost 10 million kilograms if milksolids and 6500ha of forestry planted already with more to follow.
Wine grapes, cherries, avocados, free-range eggs and honey are all sectors Craigmore is looking at.
“We planted NZ’s newest forests during 2010-12. These forests are now absorbing sufficient carbon dioxide to offset two-thirds of the net greenhouse gas emissions of a small NZ city for the next 15 years.”
As part of Craigmore’s right land, right use philosophy it is prepared to convert pasture to horticulture in what Charteris calls a once-in-a-generation chance to change land use.
It has already converted coastal Northland dairy land to permanent crops, is looking for honey businesses to integrate with forestry and to develop organic kiwifruit orchards.
“That is why we tell people it is a long-term, passive investment where they have to trust the management team and the strategy.”
The main barrier, however, is a shortage of expertise, especially outside the main growing areas of certain crops.
“Craigmore is also actively looking at opportunities to partner with Maori landowners and at other lower-impact production techniques such as organic management.”
A nine-year-old NZ-owned and operated business Craigmore is on track to next year to manage $1 billion of investments.
It has grown from three employees in 2009 to 30 today plus farm staff.
Founded in 2009 by Forbes Elworthy of South Canterbury and Mark Cox, it manages properties throughout the country.
“We want to grow something that is a NZ experience, that is not just sheep and beef but it is sustainable dairy, forestry, horticulture and even aquaculture – anything that tells a story about what NZ is.”
Most of the investors are from Europe and Britain and have been predominantly families and well-established institutions looking for something more than a financial return.
Government changes to the Overseas Investment Office have slowed further what was already six to nine-month process of considering investment by offshore entities.
Charteris said that is especially disruptive to vendors waiting to complete a sale.
“We support the provisions of the Act that it has to be a privilege to own NZ land and you need to show benefits from owning it.”
