We are highly strategic in the farms we select for investment.
We target farms with high productivity potential – that is, farms capable of performing in the top quartile for their region. The strategy is based on delivering both annual cash returns and value appreciation.
It’s an approach that delivers results. If you invested NZ$1,000 in an AGInvest property 20 years ago, it would be worth NZ$11,800 today. This compares to an average dairy farm (based on DairyNZ statistics) investment, which would have turned NZ$1,000 into NZ$8,500 over the same period. Learn more about our Track Record.
When purchasing a property, we are looking for tax-efficient returns of more than 12% per annum.
In order to be selected for purchase, the farm price must be close to a valuation conducted by a registered valuer. The overall investment return should be capable of providing investors with a 5-7% cash return and 4-5% productivity return. We also expect an inflation-based capital gain, based on the assumption that demand pressures will result in nominal increases in dairy prices, the milk price and also land prices.
How farms are selected
We identify quality, but undervalued, farms in well-established farming areas. Targeted properties have the potential to achieve a 25% lift in productivity and the opportunity for future growth, through improved infrastructure and management.
Properties are selected based on a series of parametres, including:
- Access to water.
It is no coincidence most syndicated properties are in New Zealand’s South Island regions of Southland and Canterbury. Targeted properties in these regions generally have fertile, free-draining, silt soils and good summer pasture growth (from summer rain in Southland and irrigation in Canterbury).
We then complement this with quality stock and infrastructure, top management and a sound business plan. This approach maximises a business’s ability to perform consistently, with predictable costs and reliable cashflow, while also adding to the property’s value through productivity growth.
With more than 20 years’ experience in asset management and farm acquisition, we have detailed and proven due diligence processes.
Each investment is subject to a sound and comprehensive due diligence process that includes appropriate third-party input.
An experienced team
AGInvest has supervised the development and land-use conversion of more than 45 properties over the past 20-plus years.
Our key executives and staff are leaders in their fields and have extensive – and, in many cases, award-winning – experience in practical farming. It is their job to ensure that production plans, business plans and tight fiscal management of each property are rigorously pursued.
Eight experienced Agribusiness Managers represent the interests of syndicate owners in making key management decisions and work closely with on-farm management in achieving production and profit targets. Their responsibilities include:
- Setting and managing budgets
- Financial reporting
- Mentoring and motivational skills to help young farmers achieve their goals
- Helping farmers achieve production and profit targets
- Ensuring that the business complies with key legislation and regulation.
AGInvest has a longstanding reputation as an excellent employer, with established incentive systems that reward top performance. We therefore attract top managers – individuals with the experience and drive to ensure “their” property reaches its potential. We continue to monitor and assess the management performance of each investment and provide additional support as required.
How does our management team support the owners of the property? Find out more here.