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Kakariki Fund to help NZ horticulture stars accelerate growth

30/May/2019


A wholesale investment offer to be launched this week is aimed at helping the emerging stars of the New Zealand horticulture sector accelerate their growth.

Kakariki Fund Limited, which is seeking $100 million, will invest in orchards, vineyards, plantations and farms to be co-managed by leading horticulture processors and exporters including apple growers Rockit Global and Freshmax, Sacred Hill wines, craft beer hop grower Hop Revolution, manuka honey producer Comvita and kiwifruit grower and packer DMS Progrowers.

Kakariki is targeting annual investment returns of 10%*, which will be made up of earnings from the sale of crops through the partners and any increases in land values. Investors in Kakariki will benefit from exposure to all ventures in the portfolio, reducing the risks that come with investing in a business in a single geographic location and focused on a single crop.

Through its investments in Manuka Plantations, Kakariki is aiming to achieve zero net carbon emissions by 2024, as part of a wider focus on sustainability or Kaitiakitanga.

Kakariki also intends to embark on an NZX listing within three-five years, providing an opportunity for retail investors to participate in the sector, and providing a potentially rewarding exit for wholesale investors who get in at the ground floor.

Kakariki is being promoted by MyFarm Investments, which has raised $165 million for investment into 18 individual orchard, vineyard, hop garden and manuka plantation businesses since 2015.

MyFarm CEO, Andrew Watters says Kakariki offers access to all those sectors with a single $100,000 investment.

"There is really no other single investment that gives New Zealanders access to a diverse range of permanent crop businesses, or exposure to the intellectual property our partners have invested in their plant varieties and brand stories."

Andrew Watters says forecast returns in each sector are strong reflecting the success of New Zealand horticulture in providing consumers in high value export markets a premium, high quality, great tasting product.

Forecast Kakakariki EBITDA ranges for mature well managed crops ($/cha) given normal market and climatic conditions.

Rockit Global CEO Austin Mortimer said: "We are delighted MyFarm is bringing this investment opportunity to New Zealand.

"The demand for Rockit apples is outstripping supply. MyFarm brings to the table a long-history of agriculture and horticulture management as well as a solid understanding of our customers' quality requirements. They are therefore an ideal partner to help us grow the New Zealand supply of Rockit Apples. We are looking forward to working with the Kakariki Fund, Andrew and the team."

Rockit Global produces Rockit™ a deliciously sweet, miniature sized nutritious apple that is packed into recyclable tubes. The apples are currently grown in six European Countries as well as the US. To keep up with demand Rockit plans to expand its Hawkes Bay orchard plantings from 200ha today to 600ha by 2025.

Hop Revolution CEO Jason Judkins said New Zealand hops are prized internationally for their aroma and distinctive taste they impart to beer.

"New Zealand hops are highly regarded but have been difficult to source by offshore brewers. The growing climate in Nelson and the iconic varieties we offer represent an exciting proposition to brewers, which are constantly looking for new tastes and flavours," Mr Judkins said.

"We are delighted MyFarm is bringing Kakariki to market as it has the potential to accelerate our growth in the US, Europe and Asia. As well as capital MyFarm offers Hop Revolution a deep understanding of agricultural economics and an ability to tap into a broad range of experts to help us make the most of the significant opportunity we see."

In partnership with MyFarm Investments, Hop Revolution is planting 116 cha at its Tapawera Hop Garden and is expecting its first harvest in March 2020. In preparation, Hop Revolution has invested in brand new harvesting equipment and kilns.

Kakariki's initial call of 25 cents per $1 invested is targeted to an option to purchase four initial assets:

  • A 11 canopy-hectare SunGold kiwifruit orchard in Bay of Plenty
  • A 50% share in a large-scale 130 canopy hectare hop garden;
  • 35 canopy hectares of Rockit apples
  • A 2000ha Manuka plantation development

ENDS.

Key Facts

Kakariki Board of Directors
Kakariki is headed by an independent board of directors which will make all investment and divestment decisions.

  • Julian Raine – Chair
    Nelson orchardist, exporter and chair of Boysenberries NZ and NZ Dairy Desserts Ltd, previous chair of Horticulture New Zealand
  • John Loughlin- Director
    Chair Rockit Global, Hop Revolution and EastPack (processes 27% of NZ kiwifruit), past chair of Zespri.
  • Dianne Kidd – Director
    Pioneered NZ quantitative managed funds investment research house now known as Morningstar, Director of Cooperative Bank, Former Deputy Chairman Unitec.
  • Paul Richardson – Director
    Independent financial consultant and director of the CFA Society of NZ. Former executive director and chief investment officer at Mint Asset Management.

Fund Establishment Strategy

Stage 1: Years 1-3

  • Ground floor investment offer to wholesale investors (minimum $100,000)
  • Call on application of 25 cents per share or $25,000 to purchase initial assets.
  • Initial investments weighted towards bare land development.
  • Fund to deliver capital growth from development margins plus income.

Stage 2: After 3 years

  • Offer to retail investors via NZX listing once funds raised in Stage 1 have been fully deployed and the investments are generating income.*
  • NZX share price to be determined by Fund performance at time of listing.


*Subject to favourable market conditions.

Kakariki Website: www.kakarikifund.co.nz

 


For further information please contact:

Andrew Watters
CEO
MyFarm Investments
P 029 440 6605
E andreww@myfarm.co.nz

Julian Raine
Chairman
Kakariki Fund Limited
P 021 443 993
E raine@ts.co.nz

 

 

 

 

Kakariki Fund to help NZ horticulture stars accelerate growth

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Phone: +64 6 323 2954 | Fax +64 6 323 0599
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info@myfarm.co.nz

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Grant PaytonGrant Payton
grantp@myfarm.co.nz
029 445 5871
 
Karen RichardsonKaren Richardson
karen@myfarm.co.nz
021 262 2779
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