Frequently Asked Questions
MyFarm offers three different ways you can invest in New Zealand farms.
Become a shareholder in a MyFarm syndicate: The minimum investment in a MyFarm farm syndicate is NZ$250,000, but this depends on the syndicate. Investments are currently offered in dairy and sheep and beef farms in New Zealand and Australia. MyFarm investment offers are not able to be taken up unless you are a person who falls within the exclusions applicable to offers made to wholesale investors as set out in Schedule 1, clauses 3(2)(a)-(c) and 3(3)(a)-(b)(ii) inclusive of the Financial Markets Conducts Act 2013 (FMCA). You can obtain further information on FMCA requirements, and whether you come within the exclusions at www.myfarm.co.nz/FMCA.
Investment in a MyFarm Collective Investment Vehicles (CIVs): MyFarm offers investor partnerships which invest in MyFarm syndicate investments, at a lower $20,000 minimum investment threshold. A collective investment vehicle is an entity which allows investors to pool their money and invest the pooled funds in a syndicate, rather than buying syndicate securities directly as individuals. Each new MyFarm CIV is structured as a limited liability company, and has a single investment in a specific MyFarm syndicate.
- Trade farm shares on Syndex: Syndex is an online exchange for buyers and sellers of proportionally-owned assets.
MyFarm investors have had good investment outcomes from other regions in New Zealand. However at present Southland and Canterbury dairy farms represent the best quality assets (in terms of scale, quality of improvements and production potential) and the best value for money. Be assured we are looking outside these areas.
Production targets are set after consideration of a number of factors, including:
- Production achieved in previous seasons on the property and on similar farms locally.
- Our assessment of the productive potential of the farm defined by its soils, contour, micro-climate and our ability to source water for irrigation.
- Forecast increases in production following development/more intensive management (such as better fertiliser management and re-grassing).
Farm investments are subject to a number of risks. Weather, prices, government policies and global markets are some of the external factors that can affect farm income and profitability.
However, we believe the majority of these risks can be mitigated through a thorough understanding of farming and farm investments. At MyFarm we do this specifically by:
- Targeting investment into an industry with strong fundamentals
- Targeting quality assets
- Limiting borrowing. MyFarm syndicates utilise 33% or less bank borrowing
- Thorough due diligence at the time of purchase
- Employing good people. MyFarm appoints career farmers with agood track record of performance
- Rigorous business management
- Excellent shareholder communication
That is why some people prefer to invest with us, rather than perhaps go it alone.
We aim to successfully manage farms through a variety of climatic and economic conditions by focusing on quality assets with low levels of debt and then applying the farming wisdom of our experienced, quality farm managers. MyFarm managers are highly trained, experienced career farmers and some also choose to become investors in the farm business.
We believe that investing with MyFarm is an investment in the economic fundamentals of global food demand growth backed by the security of tangible and valuable physical assets such as farm land and Fonterra shares.
Because MyFarm offers a fully managed, low hassle option and employs the best people to manage your investment.
- We provide a formal farm management system and career farmer managers.
- We identify, syndicate, improve, and manage dairy & sheep and beef farms; it is the only thing we do.
- We deliver investments that address risk as well as returns. The assets we purchase are of high quality and debt structures in our business plans are conservative.
- MyFarm’s scale allows us to pass on significant cost savings to the farm businesses we manage through bulk buying. This includes a number of important farm inputs such as fertiliser, cull cows, insurance and even interest rates.
- We provide an ‘experience’ through participative ownership. As an investor you can elect to become a board member and have close involvement in the governance of your business.
- We provide a service to sell your shareholding, should you wish to exit early.
Yes, but as yet this has not occurred. Sometimes syndicates opt to take over the management of their investment (all or mostly) after the completion of the initial 3 year MyFarm Management contract.
Your investment is solely into the farm business you select. You become a shareholder (or partner) and, if desired, a Director of that farming business which owns the land, stock, plant and, if relevant, the Fonterra shares.
Your principal return is, of course, cash returns which should commence during or at the end of your first year’s ownership. Traditionally dairy farms have also performed well during times of inflation with asset values increasing on average by 3% above annual inflation. This should be reflected when you sell your units in the partnership or the farm is sold.
A secondary but important factor is that you should enjoy your investment; both the quality of the information that you receive and the relationships that develop.
MyFarm dairy investments mean you can own a share of the New Zealand dairy industry for as little as $250,000. You have the flexibility to invest more than the minimum in one farm syndicate or make several investments across multiple farms.
The investments require an initial investment only. There is no requirement for you to introduce capital at a later date. However there may be share sales or new capital development within syndicates (such as deciding after three years of ownership to buy a neighbouring block) that could allow you to increase your investment into the business if you choose, but this would be entirely your choice, and not an obligation.
A MyFarm investment is a medium to long-term investment. If you need to redeem your investment in three to four years perhaps this is not the investment vehicle for you. This said even when you plan for a medium term investment there can be unforeseen circumstances that arise which mean you may be required to sell your shares.
You can realise your investment in a MyFarm dairy syndicate when either the farm business is sold or through a share sale managed by MyFarm. MyFarm dairy syndicate shares are sought after and typically sell at valuation within 2-3 months.
MyFarm also operates through Syndex, which is an online exchange for buyers and sellers of proportionally-owned assets.
As an owner of the farm business you are entitled to visit the farm. However we would ask that investors respect that these are working farms with very busy managers operating them. It is best to check (via the MyFarm supervisor) if the day and time you wish to view the farm is suitable for the on-farm manager.
MyFarm arranges one farm field day each year.
MyFarm strives to match like-minded investors to each farm investment. We do this by convening a conference call meeting when the investment group is close to formation. The objective being to;
- Introduce interested investors to each other
- Consider any due diligence items that have arisen
- Discuss the business plan
- Discuss the key terms of the Partnership agreements and the acceptability of the MyFarm property management agreement.
As a MyFarm investor each shareholder is entitled to be nominated for the Farm Board and can participate in the governance of the farm keeping a close eye on their farm investment.
We like to ensure the investment is inclusive and fun for all investors. This often means organising social get togethers for investors around on farm meetings and annual general meetings. We also encourage our investors to attend our biennial MyFarm Conference.
We can’t guarantee you will like all your fellow investors, but you are all have one thing in common - the property you have invested in.
The date of the planned first payment to investors is detailed in the business plan for each investment. MyFarm generally forecasts cashflow for payments to begin 9 months following establishment. However it is the Board of Director’s decision at this point as to whether payments are made to investors or used to repay bank debt.