The Merricks Capital Agriculture Credit Fund (the Fund) returned 0.8%* in April and 10.1%* on an annualised basis since inception.
The Bureau of Meteorology’s latest outlook points to a neutral ENSO phase through winter, reducing the immediate risk of widespread climate shocks. Combined with resilient commodity pricing, this provides a constructive backdrop for borrower performance and new credit deployment in the months ahead.
Recent volatility in global markets—driven by abrupt shifts in US trade policy and broader geopolitical uncertainty—has reinforced the attractiveness of agriculture as a real asset class with defensive characteristics. While the direct impact of proposed US tariffs on Australian produce appears limited, the renewed focus on food security and supply chain resilience is driving increased institutional appetite for farmland-backed credit. Investors are drawn to its inflation-linked returns, essential nature, and low correlation to traditional asset classes. As trade patterns evolve, Australia’s scale, reliability, and sovereign stability continue to position it as a preferred jurisdiction for capital seeking exposure to the food and fibre sector.
No major changes were made to the portfolio during the month. The Fund remains fully deployed, and the forward pipeline is healthy. In horticulture, the autumn harvest of apples and pears progressed smoothly under favourable conditions, with domestic pricing holding stable. Freight costs and export logistics remain key considerations for growers navigating margin pressures. Horticulture represents a 29% allocation in the Fund and is expected to grow by 5–10% over the coming year. Water security, long-term land value, and the reliable income profile of permanent plantings make the sector well suited to asset-backed credit strategies.
*These returns are stated net of fees and costs
