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We’ve had oil rigs. We’ve had diamonds. But now it’s time to beef up your investment portfolio with a little Aussie meat.

The team behind the Macquarie Pastoral Fund are in London fund-raising, reports Opalesque. For those of you of an agrarian bent, the fund, which aims to raise between A$200m ($170m) and A$1bn, will own and operate sheep and cattle down under and is thought to be the first of its kind, combining both lamb and beef production publicly available for investment.

Tim Hornibrook, director of Macquarie Pastoral Services, told FT Alphaville that the fund is already scoping out acquisition opportunities worth A$700m and is hopefully of raising close to the upper end of its range. And he explains, the advantage of having investment in both sheep and cattle is that their saleyard prices have a low correlation, but draw on similar production methods, technology and equipment.

The fund’s first investment, financed by a A$20m investment from Macquarie itself, will be the purchase of a Merino sheep stud in New South Wales.

Returns, it says, will be generated from the breeding, fattening and trading of livestock and some cropping. That sounds more interesting than the average fund brochure that drops on our desks. The value is created through the sale of livestock, as well as capital appreciation of the animals and the land held.
The intention is to build a track record, in what is considered a relatively new asset class vehicle and then float the fund in between five and eights years down the line.
Despite the demise of the Atkins diet, worldwide demand for meat is on the up. The value of beef and lamb exports grew at 8.2 per cent and 14.4 per cent a year, between 1997 and 2005, partly tied to economic growth throughout the developing world. Hornibrook explained that while 56 per cent of protein in the developed world comes from meat, in the developing world the proportion is far lower, 26 per cent.

As such, Australia’s proximity to potentiall fast growing consumer markets in Asia is an advantage - as is its record as a disease-free nation for production.
The fund will charge a 1.25 per cent management fee and a 20 per cent performance fee on returns of more than 8 per cent.

Hornibrook told Opalesque : “Historically, farmland in Australia has had returns since 1979 in line with global equities but with less volatility…We are looking at having more than 300,000 heads of cattle and 300,000 heads of sheep.”