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

The Merricks Capital Agriculture Credit Fund (the Fund) returned 0.9%* in January and 10.1% on an annualised basis since inception. The Fund declared an interim distribution of 4.0% on 31 January, which will be paid in the third week of February 2024.

No new loans were settled during the month. One loan was repaid; a 2.1% allocation for the Fund secured against two large-scale grazing properties in the Northern Territory. Repayment of the loan was from the sale of these two properties that transacted in line with our valuations for the assets to fully repay senior debt.

Above-average rainfall in Australia’s eastern states in Q4 2023 has positively impacted sorghum and rice production estimates for 2023-24, with wheat and barley production expected to meet or exceed 10-year averages. The favourable seasonal conditions also appear to be driving an uptick in farmland transactions within our portfolio. Two borrowers successfully closed contracts for asset sales in January 2024, and we expect to see at least three more in Q1 2024 that will align our loan repayments with borrower-led refinances.

We expect the Fund to remain fully deployed for 1H 2024 from a cash perspective, with opportunities to deploy senior secured credit in agriculture continuing to grow. We’re undertaking due diligence on $210m of new credit opportunities across horticulture, beef cattle, and irrigated cropping.

*These returns are stated net of fees and costs