September 28, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Two of Australia’s leaders at the forefront of natural capital and real assets – SLM Partners and Impact Ag Partners – are partnering to launch the SLM Agri Carbon Fund – a new fund to invest in regenerative agriculture and carbon storage in Australia. 

Founded in 2009, SLM Partners currently has more than US$550 million in AUM. And whether their investments have been in grass-fed beef cattle in Australia, sustainable forestry in Ireland, or organic farming in the U.S. – all of the firm’s capital commitments across their funds and separate accounts in Australia, the U.S., and Europe are made with an underlying mandate of generating positive impacts on soil health, water, biodiversity, carbon storage, and local communities. 

“Our mission is to scale up ecological and regenerative land management approaches that are commercially proven but not yet mainstream,” Brad Keith, principal, SLM Partners, told GAI News in a 2021 interview. “For investors, we believe the industry is currently in the right place to provide an excellent risk/reward over a long-term horizon.”

Keith continued, “Longer term, the benefits that come from ecological management – water holding capacity, biologically active soils, biodiversity, preservation and building of topsoil to name a few – serve to mitigate risk, reduce production costs, and enhance the return profile.”

This wealth of experience is coming together with that of Impact Ag Partners – a leading Australian manager that believes building natural capital for future generations can be done profitably.

With AUM exceeding A$955 million across Australia and the U.S., Impact Ag takes a long-term sustainable approach to agriculture through regenerative production – an approach that the firm stated has demonstrated the relationship between soil, animals, plants, and human health. 

Taken separately, both firms, which have been actively investing for nearly the same amount of time (SLM being founded in 2009 and Impact Ag Partners founded in 2010), have each had successful track records of monetizing their respective investment mandates.

Over the past decade, SLM Partners has acquired more than 1 million acres of grazing land, and has generated and sold 1.7 million tons of carbon credits. While Impact Ag Partners has realized A$1 million in soil carbon credit revenue, and has posted total client returns of seven-to-14 percent. 

SLM Agri Carbon Fund

With a strong foundation leaning on the years of expertise of both SLM and Impact Ag, this new fund has already secured a commitment from a cornerstone investor that SLM explained has an appetite for real assets, mixed farming, and carbon investing. 

The fund will identify and acquire mixed farms in certain regions of eastern Australia on which will be implemented regenerative practices such as large-scale rotational grazing, reduced tillage, cover cropping, the integration of livestock with grain rotations, afforestation, and environmental plantings of native vegetation. 

“Building on all that we have learned in Australia over the last decade, we are excited to launch this new joint venture with Impact Ag,” said Paul MCMahon, SLM Partners. “We are philosophically aligned and bring complementary skills and experience.”

The Fund also will work to establish carbon projects on these assets under government-approved modeled and measured methodologies to quantify the impacts of these measures. 

Indeed, Australia is proving to be fertile ground for the formation of such an endeavor and enterprise. 

 In October 2022, Australia’s green bank – the Clean Energy Finance Corporation (CEFC) signaled to investors its strategic plan to “aggressively expand” into sustainable agriculture through partnerships with the country’s top asset managers.

This agenda had been reinforced and solidified by the ratification of the Climate Change Bill, passed by both Houses on September 8, 2022, that re-addressed and strengthened carbon emissions reduction goals on the part of the Australian government, easing the risk profile of such a decarbonization investment mandate. 

“As Australia’s ‘green bank’, the CEFC invests to catalyze private sector capital into clean energy and emissions reduction projects, fill market gaps and help develop new markets to drive decarbonization across the economy,” commented Ian Learmonth, CEO of CEFC, last year.

All-in-all, this partnership appears to be a win-win, given the combined experience of SLM Partners and Impact Ag and the positive support from the Australian government for their mandate.

“Australian agricultural real assets continue to be a positive climate and nature-based solution for the future, whilst also producing high quality food and fiber,” said Bert Glover, Impact Ag Partners. “Our confidence in the carbon market dynamics in Australia continues to grow as does the number of carbon projects we have registered.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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