Name of fund:
Kakariki Land Generation Fund
The offer/deal available:
The Fund provides exposure to carbon markets, with the security of real asset ownership. It will purchase mispriced Australian farmland to generate premium carbon credits, via biodiverse tree planting. The land will be redesigned to integrate carbon farming with food production and will enhance ecological health.
The Fund will target an annualised total return of 12-14% IRR, derived from carbon credits, farmland lease, capital appreciation, and the value of future carbon cashflows. A distribution yield targeting 6-7% will be paid from year 3.
Key reasons investors would find it attractive to invest with you:
- Exposure to carbon markets, with the security of real asset ownership.
- A strong ecological impact, with commercial returns (non-concessional).
- A focus on carbon credits with the highest possible integrity and prices. Investors can choose to take their investment yield as cash or carbon credits.
Specific investment and benefits:
Utilising high-integrity carbon credits is essential for facilitating the shift to a low-emissions economy. Recent studies indicate that companies incorporating carbon credits are achieving decarbonisation at twice the pace of those abstaining. Morgan Stanley projects the carbon credits market to reach $250 billion globally by 2050. Such projections point to a substantial shortfall in carbon credit supply, especially with higher integrity nature-based credits, such as biodiverse tree planting. These projects are seeing up to 50% price premium in the Australian market.
The Fund offers investors a unique opportunity to access the growing carbon farming market while minimising downside risks through real asset ownership. We target areas across Australia with underutilised agricultural land, strategically identified for their potential for high carbon yields. By acquiring and redeveloping these undervalued land parcels, we not only optimise returns through carbon farming but also preserve prime agricultural land for food production. This dual-purpose approach ensures the continuity of farming operations, which is vital for local communities, while generating stable leasing revenues and minimising property maintenance costs for investors.
A third-party carbon project developer will finance and manage the tree planting program, assuming the risks involved, in exchange for a share of the carbon credits generated.
The Fund aims to deploy A$100 million, to regenerate approximately 25,000 Hectares of land, and to plant over 3 million trees.
Leveraging a rising carbon price in a supply constrained market, the Fund aims to deliver exceptional returns alongside strong ecological outcomes.