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Australian superannuation fund investment in agriculture 2014/15

27 April 2015

BDO Australia |

The importance of the agriculture sector

Our Agriculture industry plays a major role in the success of our economy and very importantly, our growth as a nation.

To ensure the industry is well placed to meet this growing demand, Australian agriculture requires active investment at both a domestic and international level.

The majority of existing investment has either been debt funded or is received from international investors. The lack of domestic investment presents an exciting opportunity for the superannuation fund industry to consider agricultural entities as viable investment options.

Superannuation funds and agriculture - the opportunities are boundless

Australian superannuation funds represent a significant investment force. Total asset value amounts to $1.93 trillion as of 31 December 2014 according to official figures from the Australian Prudential Regulation Authority.

Given the prominence and importance of the agriculture sector to the Australian economy, it would seem like a viable area for investment. To date, limited investment has been made by superannuation funds. This posed a fee questions which we wanted to delve into a bit further and understand.

The rationale behind the report

The report was established to:

  • Determine the level of superannuation fund investment in agricultural assets; and
  • Understand the current perception towards superannuation fund investment in the agricultural sector.

Report snapshot

In the first survey of its kind, BDO and The University of Queensland (UQ) assessed how much capital is being invested in agricultural products and gained some useful insights into the sentiment of superannuation funds towards investing in Australian agriculture.

Snapshots from the research revealed:

  • Less than 0.3 per cent of MySuper (a superannuation fund) assets are within the agriculture ector as of 30 June 2014
  • MySuper offerings already constitute about one-third (30 per cent) of superannuation capital
  • Superannuation funds largely invest in listed assets. if more agricultural companies became publicly listed, it could provide an easier avenue for superannuation funds to invest in the sector.

Our research findings are intended to get the conversation started on why superannuation funds are not investing in Australian agriculture and identify the underlying attitudes towards investment. It also aims to draw attention to future opportunities and highlight the current obstacles faced by the sector in gaining more superannuation fund investment.

COMMITTED TO AUSTRALIAN AGRICULTURE

BDO has a genuine commitment to the agricultural industry. Our internal Food and Agribusiness industry sector group is made up of industry experts who attend industry briefings, contribute thought leadership to the industry and actively support industry stakeholders.

Members of our Sector Group attend industry conferences such as Global AgInvest New York, Global AgInvest Singapore, Australian Farm Institute, Rabobank’s F20, Australian Agribusiness Association, Rural Press Club and The Australian Global Food Forum.

Download the report