A group of past and present Zespri insiders have set up a private equity fund aimed at raising $100 million to buy existing kiwifruit orchards, or build new ones, focusing exclusively on the Sungold variety.
About 60 per cent of Origin Capital Partners’ portfolio will be weighted towards the Bay of Plenty.
The funds partners are:
• Paul Jones, deputy chairman of Zespri and founder and managing director of the post-harvest packhouse DMS Progrower
• Craig Greenlees, co-founder and managing director of DMS, who is a former Zespri board member and chairman
• Lain Jager, a former Zespri chief executive
• Investment banker and DMS director Dominic Jones
Both Paul Jones and Greenlees are substantial orchard owners in their own right.
Origin is chaired by Simon Botherway, the co-founder of Brook Asset Management, who also serves on the board of NZX-listed Serko.
Dominic Jones, Paul Jones’ son, said the industry is characterised by high cashflow yields from land assets.
He told the Herald a committed fund was the best vehicle for investment in horticulture.
Jones said the fund would invest exclusively in Sungold kiwifruit by buying existing orchards or building new ones on bare land, or buying “green” orchards for conversion to gold.
The aim was to first raise $50m, then $100m.
“Once we get to $50m we can start spending and continue to raise funds at the same time,” he said.
“Assuming we pass $100m, that will allow a potential $200m to invest – the difference being debt – so broadly we will be getting something like 50 per cent debt into each orchard.”
The fund, whichis aimed at wholesale investors, will initially aim to acquire 10 to 15 assets. The minimum investment is $100,000.
“In a post-Covid world there seems to be an appetite from people wanting exposure to physical, land-backed assets with real cash flow,” he said.
“We saw a gap in the market and we think a fund structure makes a lot of sense.
“Agriculture and horticulture are not easy places to invest unless you have the capital and the expertise ,” Jones said.
“There are plenty of groups that have one but not the other.”
Depending on the success of the fund, the model could be rolled out to other agricultural investments, Jones said.
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