You are using an older browser version. Please use a supported version for the best MSN experience.

NZ Super Fund looks beyond dairy sector

NZ Newswire logoNZ Newswire 2/05/2017 Tina Morrison

The New Zealand Superannuation Fund, which has bought up 21 local dairy farms as part of its push into rural land investment, is looking outside the dairy sector for its next foray.

It is eyeing land used for beef and permanent crops and expansion into Australia.

The sovereign wealth fund had just 1 per cent of its $34.09 billion fund invested in rural farmland as at March 31, short of its 3 per cent goal, half of which is earmarked for local investment and the rest overseas.

According to its 2016 annual report, the $204 million rural portfolio was exclusively invested in local dairy farms although the fund suggested that is about to change with other types of rural land now on the radar.

"We are interested in more agricultural investments, not only in New Zealand, but also offshore," Neil Woods, the fund's manager in charge of agriculture and timber investments, told BusinessDesk.

"We have got nothing offshore at the moment but we are actually focusing quite a lot of effort on offshore and it's unlikely to be dairy offshore because we do it so well at home."

Mr Woods said the fund had acquired dairy land because opportunities for investment had arisen, but he was now eyeing other sectors to get more diversity.

He singled out rural land used for beef cattle or permanent crops such as vineyards, pipfruit and stonefruit as the most likely areas for future investment.

The fund is in talks with industry players to see if there are opportunities for it to invest in permanent crops, which could see it buy an existing operation or involve greenfields development where it buys and develops an orchard, he said.

It's also considering investment in beef cattle farms, which could probably be added to its dairy farm portfolio managed by FarmRight.

The fund is currently looking at investment opportunities in Australia for beef and permanent crops, which may eventuate towards the end of the year, he said.

The Super Fund was set up in 2001 to help meet the country's future pension needs.

image beaconimage beaconimage beacon