FEATURED IN AUSTRALIAN FINANCIAL REVIEW: Merricks’ agricultural fund eyes a further $500m raising
16th July 2023
By Larry Schlesinger, Australian Financial Review, Jul 16, 2023 – 2.55pm
Merricks Capital, the non-bank lender backed by Melbourne’s wealthy Liberman family, expects to raise up to $500 million to expand its agricultural real estate lending amid a pullback from the big banks.
But even as it does so, the lender will take a more conservative approach as drier weather looms for farmers, executive chairman Adrian Redlich says.
The Merricks Capital Agriculture Credit Fund, which launched in 2021 to provide capital for farm acquisitions, returned 10.8 per cent in the 2023 financial year, including a distribution of 8 per cent.
That was higher than the 9.8 per cent the fund has returned on an annualised basis since inception as it benefited from rising interest rates and less competition from banks and other non-banks.
“Based on the current opportunity set, we could raise an extra $500 million and maintain our returns and quality [of our loan book],” Mr Redlich told The Australian Financial Review.
The fund had 21 loans on its books last month worth just under $400 million. Its two biggest exposures were horticulture and meat and livestock.
About $190 million of new loans are now in due diligence. The lender is favouring sectors near the bottom of the cycle but expected to rise again, such as avocados, macadamias and almonds.
Across its Agricultural Credit Fund and its diversified Partners Fund, Merricks has just under $1 billion invested in agriculture credit, of which 80 per cent to 90 per cent is farm-backed.