Origin Capital Partners (OCP) launched in November aiming to initially raise $50 million in its first round of funding to help finance the purchase of SunGold kiwifruit orchards .
“We got to $50 million before Christmas. Funding close off is the end of January and we think we will end up closer to the $80-$90 million range,” one of the company’s principals Dominic Jones said.
The group has also secured four orchard properties for purchase; two in Bay of Plenty and two in Gisborne. One Gisborne property is an 11ha green-fields orchard site, while the other properties are established seven to nine-hectare properties.
“They are all good sized properties and have record volumes of fruit on them this season,” Jones said.
The group is also considering two other properties, including one in the Kerikeri district.
Origin has been established with the sole initial goal to purchase only SunGold kiwifruit orchards, but will consider branching into other land based activities at a later date.
With funding secured for properties, the group aims to raise 50% of the required orchard values in debt, which is about the industry average.
This will be secured over the land itself rather than the company’s cash assets.
Jones says the typical investor profile has been older investors with a rural background seeking somewhere to invest that delivers a return better than historically low bank deposit returns.
Typical investment amounts have ranged between $500,000 to $1 million, and the oldest investor is 93.
“The lower deposit returns are driving investment strongly, especially for this demographic that may have been reliant upon term deposit incomes,” he said.
Cash returns on SunGold orchards have ranged from 10-13% for the heavy cropping, high-value fruit. It is also showing good cropping capacity in areas where Green fruit may not be so prevalent, including parts of the East Coast and in Northland.
However, investment costs are high for this variety, with Zespri SunGold licences selling for $400,000 a hectare last year, before land and infrastructure is even factored in.
A further 700-plus hectares are due for SunGold licencing tender again later this year.
Jones says the group may consider the new Red variety at some later date, but this crop still carries some risk given its newness, and some issues still to be dealt with around cropping volumes and fruit quality.
Meantime, it remains focused on SunGold orchard opportunities.
“We have not made a decision yet after this first round how much we will raise after that, but we have had no difficulty finding the orchard assets nor the investors for them,” he said.
