Macquarie delays close for A$1bn pastoral fund

The Macquarie Pastoral Fund has surpassed A$750m in commitments and is hoping to secure the final A$250m in the first quarter of 2009. It was originally hoping to wrap-up its fundraising effort by year-end 2008.

The Macquarie Pastoral Fund, a Sydney-based fund that aims to own and operate cattle and sheep properties across Australia, has delayed the final close on its A$1 billion (€500 million; $660 million) fundraising effort.

Macquarie Pastoral Fund:
bullish on cattle prices

The fund has A$750 million committed so far and is hoping that an extended fundraising timetable will enable it to secure the final $250 million in commitments by the end of the first quarter of 2009, Tim Hornibrook, the head of the fund, told InfrastructureInvestor.

“That is the goal but having investors work to your timing in the current climate is challenging for them,” Hornibrook said.

The fund has a preemptive rights mechanism that allowed it to raise A$1.3 billion by 31 December 2008 or keep fundraising indefinitely until it reaches A$1 billion, but any interests above A$1 billion must be offered to existing investors, Hornibrook explained.

Macquarie Pastoral Fund is being raised through a wholesale offering to pension funds, endowments, funds of funds and similar institutional and qualified investors. The wholesale offering allows the fund to market itself publicly without tripping the same regulatory requirements under Australian laws as a retail offering to the general public. Most of its investors are non-Australian and Hornibrook sees particularly strong interest from US-based investors.

The fund went to market in June 2007 and made its first acquisition a month later when it purchased the Pooginook Merino Sheep Stud in New South Wales, which it later combined with an adjacent property. The fund's operating company, the Paraway Pastoral Company, has now purchased ten properties totalling 100 hectacres of land.

Hornibrook's overall strategy is to roll-up existing sheep and cattle properties across Australia and generate benefits of scale associated with serving larger flocks with less labor and machinery. The ultimate goal is to become one of the biggest cattle and sheep producers in the world and to take advantage of rising meat prices over the long term.

According to figures recently released by the Department of Agriculture, Fisheries and Forestry, Australian beef and veal exports for 2008 reached 957,479 tonnes – two percent higher than 2007 when 941,400 tonnes were exported and surpassing the previous record of 953,932 tonnes set in 2006.

The fund’s net asset value was up 10 percent year-over-year from 31 December 2008 to 31 December 2007, Hornibrook said.