KEY POINTS:
What is it called and what sort of savings product is it?
The AGRI Private Capital Fund is a private equity fund investing in farms and agricultural businesses.
Who is behind it?
It is owned by BT Funds Management, part of Westpac, while the investment
management is provided by a company associated with Agricultural Investments (AGInvest), which specialises in rural investments.
Who is the target market?
The fund appeals to people wanting exposure to NZ's biggest export sector, and investors prepared to take on the risks of private equity investment. BT says it is also likely to appeal to rural people as many like to invest back into a sector they know.
What return does it offer?
The fund is targeting a gross 15 per cent annual internal rate of return on equity invested in assets (before tax and manager's incentive returns but after annual management fees) over the life of the investment.
When was it launched?
Thursday, May 10, and remains open for three months.
What other products is it like or is it competing with?
BT says the fund should be thought of as a private equity investment and in that sense it is up against other such funds. But there are few of these available to the public and even fewer which invest in the primary sector.
Is it long term, short term or medium term?
This is a long-term investment with a 10-year time horizon.
What is the unique selling point?
Those involved bring proven skills to investing in this sector. An extra plus is the fund plans to "actively manage" its assets and add value to them and private equity is an innovative way to access the primary sector.
How strong a stomach do you need for it?
On a scale of one to 10, probably around seven.
What's the hitch?
The underlying investments are exposed to primary sector risks, commodities and property prices. These can be unpredictable. Also there is a question around climate change and managing methane emissions from stock. BT says there are pluses and minuses for the fund in this area. Fund specific risks centre around the long-term, closed-end structure of the fund and the potential inability to sell before the 10-year period is up.
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