SLM Partners, an asset manager, joins forces with Impact Ag Partners to create fund.
With inflation high and investors increasingly looking for investments which have a positive environmental impact, regenerative agriculture has recently been seeing much higher investor interest. Regenerative agriculture involves the use of farming and grazing practices which aim to combat climate change by rebuilding soil organic matter and restoring degraded soil biodiversity. Often this doesn't use tillage, resulting in carbon drawdown and improving the water cycle at the same time as enhancing profitability.
This joint venture brings together two experienced managers in the field of regenerative agriculture. "Building on all that we have learned in Australia over the last decade, we are excited to launch this new joint venture with Impact Ag. We are philosophically aligned and bring complementary skills and experience." Paul McMahon, a co-founder and managing partner of SLM Partners, said in a statement. He believes that the financial returns from this asset class are good and it also acts as a great inflation hedge.
Both SLM and Impact Ag have a track record of building and monetising the natural capital in the assets they manage. They think that regenerative agriculture can deliver essential nature-based climate solutions at scale.
SLM Partners is a global real assets investment manager with $550 million in assets under management. It manages funds and separate accounts in the USA, Australia and Europe, focusing on regenerative agriculture and forestry practices which offer attractive risk-returns, increase climate resiliency and deliver positive impacts for nature. In Australia, over the last decade, SLM has acquired more than 1 million acres of grazing land and generated and sold 1.7 million tons of carbon credits. See more here about the firm’s funds.
Impact Ag Partners is a specialist agriculture real asset manager and operator with expertise in regenerative farming principles that result in natural capital monetisation opportunities. Founded in 2010, it manages over $500 million across Australia and North America.
SLM Agri Carbon Fund
The SLM Agri Carbon Fund will combine experience from both SLM Partners and Impact Ag Partners to scale up regenerative, low-carbon farming systems in Australia.
The fund has secured commitment from a cornerstone investor that has an appetite for a real asset, mixed farming and carbon investing, the firm said. It will acquire mixed farms in select regions of eastern Australia and implement regenerative practices such as large-scale rotational grazing, reduced tillage, cover cropping, integrating livestock with grain rotations, afforestation and environmental plantings of native vegetation.
The SLM Agri Carbon Fund will also seek to establish carbon projects on its farms under government-approved modelled and measured methodologies to demonstrate the impacts of these practices.
"Australian agricultural real assets continue to be a positive climate and nature-based solution for the future, whilst also producing high quality food and fibre. Our confidence in the carbon market dynamics in Australia continues to grow as does the number of carbon projects we have registered,” Bert Glover at Impact Ag Partners said.
Tarun Nagpal, CEO and founder of global alternatives solutions provider S64 also believes that there has been increased appetite for agricultural land, which acts as an inflation hedge, especially in regenerative agriculture in Australia. See here.