Merricks Capital Agriculture Credit Fund Portfolio and Market Update – November 2024

The Merricks Capital Agriculture Credit Fund (the Fund) returned 0.8%* in November and 10.2%* on an annualised basis since inception.

The Australian Bureau of Agricultural and Resource Economics (ABARES) forecasts a 7% increase in the gross value of agricultural production to $88.4 billion in 2024–25, underscoring the sector’s resilience. Anticipated improvements in the global economic outlook for 2025, supported by easing inflation and interest rates, are expected to strengthen agricultural demand. However, uncertainties around U.S. policy and Chinese consumption could introduce volatility in export markets, emphasising the importance of disciplined portfolio construction, including sector and borrower limits.

During the month, the Fund received a partial repayment from a mixed-farming business in Western Australia (3.5% allocation). This repayment was driven by equity contributions from shareholders to reduce debt as part of a bank refinance strategy. Additionally, we commenced due diligence on a $102 million loan to a Queensland-based horticulture business that primarily grows and sells sweet potatoes and sugarcane within Australia.

We continue to focus on increasing our exposure to mixed farming, horticulture, and downstream supply chain sectors, which are well-positioned to deliver strong risk-adjusted returns. With the new loans currently in due diligence, we anticipate structuring and settling $250m to $400m of new loans in H1 2025.