Hollywood-based private equity firm RRG Capital Management is looking to seize the moment and refresh its portfolio of Australian agricultural assets. 

The sustainable real assets firm has put up all its properties “down under” for sale with Colliers. This comes after the firm started investing in Australian almond farming about a decade ago to capitalize on cheaper land values compared to California.

The move is a strategic off-loading of maturing assets in an active market, said Ari Swiller, managing partner at RRG and chair of the firm’s investment committee.

“We’re in the fund business, so there is a horizon on how long we can be invested in assets, and there are a few other almond assets coming to market. We think ours is the best in class,” Swiller said. “There just seemed to be a movement and an interest growing around investments in Australia around agriculture.”

In the turnover, RRG listed 460-hectare macadamia development Nambucca Farms, major almond-grower Koompartu Farms, and Manta Farms, one of Australia’s largest contiguous table-grape vineyards. All three operations sit in the firm’s Sustainable Water Impact Fund, which invests in land, water and agri-food across the U.S., Latin America and Australia. 

‘A premium’ on fruits, nuts

The market’s primary buyers include Canadian pension plans and North American insurance companies, who look for turnkey, low-risk assets ready to deliver amid surging demand for nuts and certain kinds of table grapes, Swiller said. 

“Diets are getting healthier and healthier, which is putting a premium on almonds and a premium on fresh fruit, less processed foods, so there is definitely some tailwind to what we’re doing,” he said.

To add value at Victoria’s Manta Farms, the firm swapped out vines growing standard, commodity grapes to sought-after proprietary grapes bred specially into the Autumncrisp variety. The transition, though costly, carries promise to counteract market pressures – like oversupply and waning demand for commodity grapes – that have slumped the table grape market, Swiller said.

“When you pull out a line, you have to spend a bunch of money, and it’s three years to start seeing cash flow again,” he said.

While the firm looks for an exit out of its current Australian assets, its managers are actively underwriting new investments in the country’s agriculture and energy sectors. 

“We’d like to reinvest,” Swiller said. “It’s not a goodbye. It’s just time to move on to some new assets.”