Southern Pastures Acquires Significant Stake in Top NZ Dairy Company

October 27, 2017

Southern Pastures, the largest institutional farmland fund in New Zealand, has acquired a 25 percent stake in premium New Zealand dairy brand, Lewis Road Creamery – making Southern Pastures a cornerstone investor in the company.

Founded by Peter Cullinane in 2012, Lewis Road has grown to be recognized as the premium dairy brand in New Zealand, offering Organic and Premium lines of milk, along with chocolate butter, and ice cream.

Under the framework of the deal, Cullinane will remain the company’s largest shareholder, and Prem Maan, executive chairman of Southern Pastures, will join the Lewis Road board.

Southern Pastures concentrates on investments in New Zealand’s dairy sector, with a focus toward free-range, grass-fed operations that place an importance on animal welfare and sustainable practices that lead to the delivery of  premium dairy products.

The firm closed its New Zealand dairy fund, Southern Pastures LP, in February 2015 at $315 million in net assets, and announced the launch of Fund II in September of that same year.

“We got all the basics right in Fund I with our unwavering pure dairy focus, institutional quality world-class investing, a long-term horizon rather than a pre-defined term, the highest standard ESG policies and practices, and with our best-in-class fund structure that provides ease of ‘plug-and-play’ for prudent institutional investors,” Maan told GAI News in September 2015.

“Investors find our proven expertise and focus on generating alpha through best-practice and hands-on management appealing. We do not rely on passive beta to deliver returns. This makes Southern Pastures attractive even to investors who already have an allocation to passive farmland strategies.”

Southern Pastures’ success and investment management is evident in its portfolio.

“We have invested into and operate 19 dairy operations and a beekeeping business where we have embedded sustainable farming and business practices. Lewis Road Creamery’s approach is complementary to our goals and vision,” Maan told Stuff.

Lewis Road plans to use the capital and backing from Southern Pastures to drive the development of new products and the offshore expansion of the business. Toward this end, the funds will be allocated to building additional processing facilities, according to Cullinane.

“Lewis Road has become the premium dairy brand in New Zealand and we expect that, with our support, Peter and his team will be able to develop more exciting products and investigate potential offshore markets for expansion,” Maan said.

“We’ve always thought of Australia and China as being the two most obvious markets,” said Cullinane, “…and I think both of those remain very much in consideration but the interesting thing with Southern Pastures is that they have a somewhat wider view of the opportunities.”

Southern Pastures foresees itself as a long term partner for Lewis Road, which will continue doing business with the same team of 15 in place, according to Maan, who said, “There is no intention to change any staffing, operational or commercial arrangements at Lewis Road. Southern Pastures will play the role of a supportive and constructive long-term shareholder fostering innovation and expansion.”

-Lynda Kiernan 

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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