KEY POINTS:
What is it called and what sort of savings product is it?
Murray Creek Diary Farm is a direct, syndicated investment in a 413.5-ha Southland farm.
What is the company behind it?
The offer is being put together and promoted by Roger Dickie (New Zealand), a company normally associated with forestry investments. It manages 86 other syndicates. The company is looking to raise $8 million from the public for Murray Creek.
Who is the target market?
Dickie says it, "provides a rare opportunity for investors who wished (sic) to participate, not only in the New Zealand dairy industry, but also to indirectly own a share of an investment in tangible assets, prime dairy land, Fonterra shares, livestock and plant".
What return does it offer?
No return figures are being promoted. Rather Dickie says they will come from capital value increases of the land, management of the farm and Fonterra shares.
When was it launched?
February 27.
What other products is it like or is it competing with?
This investment is relatively unique and will only appeal to a small group of investors.
Is it long term, short term or medium term?
Long term. While Murray Creek has a number of factors which will drive its returns, most of them, such as management changes, will take time to deliver. Also the returns are predicted on the diary sector continuing to prosper.
What's the unique selling point?
Having an investment in the primary sector and New Zealand's booming diary business.
How strong a stomach do you need for it?
At face value the investment looks to have a moderate risk. However, the reality is several factors, including its size and lack of liquidity, place it a bit further towards the high-risk end of the investment spectrum.
What's the hitch?
If you want out you will have to sell through a private secondary market run by Dickie or private treaty. Also other investments in the farming sector - such as BT Funds Agri Private Capital, ABN Amro Craigs Dairy Equities and the NZ Rural Property Trust - haven't been as successful as predicted. Investors should compare the differences.
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