24 Feb 2012

Charities interested in new dairy farm fund says director

7:01 am on 24 February 2012

A new dairy farm investor says charities have already expressed interest in investing in its new fund.

Pastoral Dairy Investments plans to buy between seven and 10 large dairy farms over the next 18 months, which it expects to generate pre-tax returns of 5 to 6%.

The farms will be managed by MyFarm, which already manages 47 farms across New Zealand.

MyFarm director Andrew Watters says the fund hopes to raise $25 million through an initial public offering, with private institutions then expected to invest another $50 million.

Mr Watters says he expects charities to show particular interest in co-investing.

He says MyFarm can provide charitable investors ownership at a limited partnership level and that way returns from the farming businesses will flow through to them pre-tax.

Mr Watters says because they are not tax paying entities, that is very efficient allowing them to access a tax free income stream, but through companies they cannot claim tax back that's already paid.

He says investors and institutions currently find it hard to access dairy farm investments, and Pastoral Dairy Investments is set up so it could eventually list on the NZX.