MyFarm To Form $190 Million Kiwifruit Investment Fund

New Zealand primary sector investment manager MyFarm today announces it is forming a new $190 million  kiwifruit orchard investment vehicle after investors in all 11 of its kiwifruit orchard partnerships voted to amalgamate.

The MyFarm KiwiFruit Fund is bringing together 13 Bay of Plenty and 4 Northland SunGoldTM kiwifruit properties and the associated shares in the grower-owned Zespri into what will be one of New Zealand’s largest kiwifruit investment entities. The properties have just over 155cha  planted in SunGoldTM kiwifruit and in the 2024 season produced more than two million trays of SunGoldTM kiwifruit from a mix of developed and developing orchards.

MyFarm also announces that it plans to offer wholesale investors the opportunity to participate in the fund, with capital raising set to commence in July.

MyFarm Chief Executive Andrew Watters said: “The MyFarm KiwiFruit Fund creates an orchard investment business that operates at scale and reaps the benefits of lower operating and financing costs than were available to the individual partnerships.

“It will offer wholesale investors a diversified investment in one of New Zealand’s most successful primary export industries. The fund will own a broad portfolio of properties across New Zealand’s key kiwifruit growing regions, mitigating the risks associated with the ownership of a single orchard. It will also benefit from multiple income streams, including from a planned upweighted holding of Zespri shares.”

MyFarm KiwiFruit Fund Chairman designate David Jensen said: "I am delighted the partnerships have voted to amalgamate. This initiative positions the Fund and its investors to benefit from the expected sustained growth of the New Zealand kiwifruit industry.”

Mr Jensen is currently Chair of 10 of the partnerships being amalgamated into the fund. He is a kiwifruit grower and dairy farmer, a Director of integrated Kiwifruit producer EastPack and the Lincoln University Council. He will be joined on the fund board by Independent Directors Sally Gardiner, and Bridget Coates alongside MyFarm appointed directors Paul Richardson and Andrew Watters.

MyFarm, which will manage the fund, has been working with the 11 partnerships to consolidate their assets since November 2023. Voting by the partnerships’ 560 investors concluded last week following a series of meetings held across New Zealand in February and March and by webinar in May and June. Investors in the syndicates will receive units in the fund equal to the value of their investments in the individual partnerships.  

Mr Watters said the fund would increase the liquidity of the capital already invested in the partnerships. Units of the fund would be quoted on the Syndex exchange and will be available to trade through a new quarterly auction mechanism.

“The size of the fund, the regional diversification, the access to Zespri share dividends and the targeted returns would make the fund attractive to a broad range of investors, including institutions looking to gain exposure to the sector, Mr Watters said.

The fund is aimed at providing investors with relatively low risk exposure to long-term ownership of quality Kiwifruit orchards, planted in protected PVR  kiwifruit varieties, and to ownership of Zespri shares.  

“Kiwifruit industry export receipts have grown 571% between 2000 and 2023 , while SunGold orchard operating margins are among the highest in horticulture, with Orchard Gate Returns on mature orchards typically ranging from $150,000 to $200,000 per canopy hectare,” Mr Watters said.  

Mr Watters said the next stage of the fund formation process was for the fund to settle the amalgamation with the issue of units to partnership investors by 10 July 2024. It would then open the fund for subscription to wholesale and institutional investors. MyFarm expects to release an information memorandum on the 9th of July 2024.

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