Former AACo CIO Troy Setter walks talk on Terra Firma

TROY Setter recently spent a week in Rome with Terra Firma founder and chief executive Guy Hands. And he liked what he saw.

TROY Setter recently spent a week in Rome with Terra Firma founder and chief executive Guy Hands for the private equity giant’s half-year review program. And he liked what he saw.

“I enjoyed his energy and understanding of the industry,” said Mr Setter, former Australian Agricultural Co chief operating officer. “But also his bigger-­picture understanding of multiple industries, how they interact and the opportunities for investment.

“He is passionate about the ­demand for high-quality Australian beef throughout the world, but especially Asia.’’

Terra Firma, one of Europe’s largest private equity firms, has investments in a range of industries including renewable energy, housing, aircraft leasing and cinemas. Its biggest disaster was the pre-GFC purchase of music group EMI, on which it lost a reported $US2.5 billion. Its losses at Consolidated Pastoral Co have been nothing near that scale, but Mr Setter is the company’s fifth chief executive in as many years.

He isn’t daunted. “I believe in the beef industry and have worked in agriculture most of my career. I am really enjoying working for private equity. The engagement you can have with Terra Firma I find really positive and quite enjoyable. They are patient capital. They understand the challenges and opportunities of running a beef and cattle company in Australia,’’ he says.

At AACo, Mr Setter successfully executed a three-year strategic plan to restructure the company’s operations, diversify sales to new markets and increase profitability. He worked closely with long-serving AACo chairman Donald McGauchie.

“He was a great communicator. Very clear. Certainly, he understood and communicated well the drivers to global agribusiness. He always had a good global view, but could bring it back to an on-ground view,’’ he said.

Mr Setter began his career out of school at the Kahlbetzer family’s giant Twynam Agricultural Group, where he stayed for 10 years, finishing as manager of Gunnee Station in NSW.

He many times met German-born John Kahlbetzer — whose family’s worth is said to be well over $1bn. Setter says his greatest teaching was simple. “Disciplined trading. And John senior had a vision for the future value in agriculture.”

He sees similarities in working for a family company and a private equity firm.

“They (the Kahlbetzers) were very passionate about what they did. They put a huge value into sustainability. I can see parallels with working for a family corporate and working for Terra Firma … They are not afraid to try new things, like new R&D.’’