How MyFarm earns its fees

Investors looking for access to dairy farm syndicate or ‘equity partnership’ investments have a number of alternatives. In broad terms they can invest in a MyFarm syndicate; a private syndicate or a syndicate facilitated by a third party such as a bank or accountant.

KEY QUESTIONS BEFORE STARTING OUT

There are a number of ‘first-up’ questions that need to be asked before considering a farm investment. These include;

• Has the farm been purchased for a fair price?
• Do production and cost forecasts look realistic?
• Is the farm manager suitably qualified?
• Is the farm manager’s contract fair to the investors?
• Is the debt structure appropriate and consistent with the objectives of the investors?
• Is there experience in how to run a successful business with multiple owners? Do all parties understand how this affects decision making and the need for communication?

THE MYFARM OFFER

In return for a one-off fee of 3.75% of assets, MyFarm will establish the syndicate including sourcing a group of investors who will own and govern the property.

A sister company, MyFarm Management Ltd then offers a three year farm management contract to implement the business plan and administer the business.

EXPERIENCE COUNTS

MyFarm has successfully syndicated more than 50 dairy farms over 21 years. Our track record (see separate fact sheet) shows returns significantly above industry averages.

EARNING OUR SETUP FEE

MyFarm is very experienced in purchasing property, (MyFarm has been involved in buying over 100 farms, most of which have been bought in the past five years). It is our focus to earn our set up fee off the vendor in terms of the farm and stock purchase price and through interest rate savings we secure from banks.

Significant discounts are also earned on plant and equipment we buy for the syndicate.

STRUCTURE DELIVERS RESULTS

MyFarm syndicates are established with a proven business structure including comprehensive partnership, shareholder and management agreements.

The business also has a disciplined administration team and a dedicated supervision team. A focus on achieving budget targets and excellent communication safeguards your investment and ensures we achieve dividend payment expectations.

USING OUR SCALE TO BENEFIT INVESTORS

MyFarm properties have an annual turnover of more than $100 million - because of this we can earn significant discounts on our major inputs; fertiliser, insurance, feed and farm supplies.

The benefits that MyFarm is able to pass onto syndicates are equivalent to more than half our annual management fee.

INVESTMENT DIVERSIFICATION

MyFarm offers investment diversification for those investors with more than $250,000 to invest. 

Investing in a number of properties reduces performance risk, provides geographical diversity and also enables investors to spread their exit by selling investments at different times.

AT MYFARM YOU CAN EXIT

Farm investments are long-term commitments. But sometimes unexpected life events or other business opportunities mean investors want or even need to sell their shares.

In 2011 MyFarm facilitated $5.7million of syndicate share sales within 2% of their value as determined by an independent valuer (i.e. Net Asset Value) on behalf of nine shareholders in four dairy farm syndicates. The shares were purchased by a mix of five new investors and 11 shareholders in other MyFarm syndicates.  In 2012 share sales are also going steadily – well ahead of any other dairy farm investment company.

The main criteria with MyFarm share sales is the shares are properly valued; a process which normally involves the company accountant. Share sales normally require a two to four month period.

August 2012