Warakirri milks a gap in demand

Australian agricultural asset manager Warakirri says it plans a $500m-plus expansion into the dairy farming sector via a new trans-Tasman investment fund.

Aurora Dairies CEO Ben James

Australian agricultural asset manager Warakirri says it plans a $500m-plus expansion into the dairy farming sector via a new trans-Tasman investment fund.

Warakirri Asset Management is planning to raise more than half a billion dollars to acquire and operate dairy farmland across both Australia and New Zealand.

Initially, Warakirri is looking to raise $150m in capital to use alongside some debt to start the portfolio.

The strategy is aiming to deliver risk-adjusted returns of more than 10 per cent per annum by investing in a diversified portfolio of investment-grade dairy farming and infrastructure assets.

Warakirri declined to comment when asked whether any seed assets had been acquired already.

The new strategy will be led by Ben James, the chief executive of Aurora Dairies, a business owned by Canada’s PSP Investments that has been managed by Warakirri since 2019. Aurora Dairies owns 57 farms across Australia and New Zealand and is the largest producer of milk in Australia at present.

“Dairy is the third largest food source by volume globally, and not only is total milk consumption growing, but per capita consumption is growing, with around 15 per cent of all new food consumption via dairy products,” Mr James said. “Growing demand and shrinking production has supported milk price growth over the long term which has outpaced inflation, and which is expected to be supported by widening milk supply gaps.”

Warakirri Asset Management was established in 1993.

Managing director Jim McKay said: “This strategy reflects our high conviction that the dairy industry has a compelling structural imbalance that underpins long term return on investment.”

Weekly Times