ECOSSE Capital Partners has cemented its place as one of the few non-bank lenders supporting Australian agriculture, with the launch of a $120 million fund.
The fund will be directed at Ecosse’s core business of providing non-bank lending to Australian farmers.
“We are seeing unprecedented demand for our lending products from farming groups across the country,” said Ecosse managing director Anthony Guy.
“Since the Banking Royal Commission, we have definitely seen some pull back by the major lenders in the agricultural sector. While there is a deep pool of non-bank lenders servicing the residential and commercial property sectors, there are fewer alternatives to mainstream lending when it comes to agricultural businesses.”
The mainstream banks struggle to assess the credit worthiness of many farming operations given the continued pull back of key lending staff from the regional areas yet Ecosse like the sector.
“On a risk adjusted basis, private agricultural credit is arguably the best way to best way to participate in the robust Australian agricultural sector,” he added.
Latest statistics show that while the sector receives in excess of $4 billion in new lending per month, average gearing across the sector is only 15%, which sits at at about half that of the residential and commercial sector.
“That gearing differential represents a significant pool of untapped equity that can be used to secured debt for much need productivity and farm improvement initiatives Australia-wide,” he continued.
With this latest fund Ecosse is hoping to help close that gap.
Backed by a strong track record of returns to date, the fund offers investors real property security and diversifications across farming assets, commodities and geographies, with all underlying loans secured by low LVR farm mortgages.
“By focusing exclusively on agriculture credit investment, Ecosse has built efficiencies and deep sector expertise and an unparalleled Australia-wide network of referral partners to ensure we see the broadest range of lending opportunities. Our historic returns are extremely competitive.” said Guy.
The fund is a managed investment scheme with an independent trustee, BMYG Capital Pty Ltd. Established in 2010, BMYG are an active investor across private markets with over $600 million funds under management. The first close is March 2024 with an anticipated fund size of $120 million.
