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, (We have bought 19 farms in the past 12 months). 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, at last calculation, were 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. In 2010 50% of the money invested with us was from repeat investors as people put a ‘toe in the water’, liked what they experienced and invested in further properties.

Investing in a number of properties reduces the risk that your chosen dairy investment doesn’t quite perform for some reason, allows you to get some geographical diversity and also enables you to spread the exit from your investment as different investments are sold at different times.

AT MYFARM YOU CAN EXIT

Farm investments are long-term commitments - at the same time life events or other business opportunities may mean that an investor wants or even needs to sell their shares.

An old saying is that syndicates are “easy to get into but hard to get out of”. By comparison, MyFarm has a good track record of share sales; we offer shares to investors alongside our normal syndicate offerings.  The main criteria is that the shares are properly valued; a process which normally involves the company accountant. Share sales normally require a two to four month period.