PSP Investments signals a possible doubling of its Aussie farm, water assets
It’s just forked out more than half a billion dollars on Australian farms on behalf of Royal Canadian Mounted Police — and PSP Investments has vowed to spend even more.
The Canadian charge for Australian farmland is unlikely to slow down and could double over the next decade.
That’s the view of Marc Drouin, the senior managing director of Montreal-based PSP Investments, the pension fund for the Royal Canadian Mounted Police and the biggest investor in Australian land and water assets.
PSP this week forked out more than half a billion dollars for one of the nation’s biggest farming portfolios and has vowed to spend more.
Australian Food and Fibre, a joint venture between PSP Investments and the Robinson family from northern NSW, this week announced it had acquired 100 per cent of NSW cotton grower Auscott Limited from its US owner JG Boswell Company.
The deal, likely to be one of the biggest in Australian farming history, includes 22,000ha of developed irrigation country and more than 143,000 megalitres of water entitlements, five ginning facilities capable of producing more than a million bales of cotton annually, two warehousing operations and a classing laboratory.
Auscott was placed on the market in July last year, with expectations of $500-$600m. In 2019, Auscott sold its Midkin aggregation to AFF for a rumoured $300m.
The deal has taken PSP’s investments in Australian agriculture to well over $4b.
Speaking to The Weekly Times from Canada yesterday, Mr Drouin said PSP had plenty left in the tank in regard to investment in Australian agriculture. Natural resources, including agriculture, makes up 5 per cent of PSP’s annual allocation. The fund last year had $C170b ($181.3b) in assets under management.
“(PSP has) been growing at a fairly healthy clip and we are expected to double or so in the next 10 years, which means (from a natural resources standpoint) we have got to double again our deployment,” Mr Drouin said.
“If you think of the last two or three years we have invested somewhere between $C2 billion and $C3 billion per average year … and a large part of that has been in Australia.
“I don’t see that slowing down anytime soon.”
PSP was involved in more than $2.3b worth of transactions alone in late 2018 and 2019. This year it paid about $100m for two major Australian dairy farm portfolios.
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