$120m cattle station portfolio up for sale after Rich Lister's death

Based on a model of sustainable and regenerative agriculture, Packhorse Pastoral had raised $100 million from 117 high net worth investors (including Rich Lister Terry Snow) and acquired three properties spanning a total of 27,124 hectares before Mr Strachan passed away. Over five years, he hoped to raise $1.5 billion and create a 2 million hectare cattle and carbon sequestration portfolio.

The properties in its portfolio – and now available to purchase – comprise the 8344-hectare Stuart’s Creek Station near Roma in outback Queensland, the 10,029-hectare Moolan Downs Station in Queensland’s Western Downs region and the 8371-hectare Ottley Station, 50 kilometres west of Inverell in northern NSW.

These generated income as “grass motels” leased out to cattle producers looking to fatten their herds – a process known as agistment. Further down the track, they would also generate carbon credit income through the planting of legumes in paddocks that sequestered carbon from the atmosphere and put it back in the soil.

Packhorse chairman and veteran fund manager Tim Samway said his late business partner and friend was integral to the success of Packhorse as both its “spiritual heart and [financial] backer”.

“Tom is impossible to replace,” Mr Samway told The Australian Financial Review.

“We’re on a steep growth path, acquiring properties quickly with a strong pipeline of opportunities, but we needed more capital. With Tom dying, we are not able to achieve all that we wanted to do as he was funding the whole process.”

While the properties can be acquired as a portfolio, or individually, Mr Samway said it was not just a straight sale with Packhorse also open to a new capital partner coming along and making an offer to buy out the fund.

“Our first priority is to our shareholders, and ensuring we achieve the best outcome for them,” he said.

“Someone could come in with a substantial new level of capital and make the business flourish. But if the best alternative is a lot of local landowners, who think these are cracking properties, buying them, that might be awesome too.”

CBRE Agribusiness managing director David Goodfellow and his colleague James Auty are handling the sales process.

While the fund has yet to pay a dividend – investors bought in the understanding it was a long-term play – they are likely to make a solid return from “very substantial” capital growth.

“Initial subscriptions to the fund were at $1 per unit. A conservative valuation, has put them at $1.17. We think the [rural property] market has moved very considerably and expect a realisation of much higher valuation,” Mr Samway said.

With the growing attraction of “natural capital” assets – the new buzzword for sustainable farmland – the Packhorse portfolio and its future carbon income streams is likely to appeal to both corporate investors and local farming interests.

“Corporates are still keen for more land, and farming families are also cashed after three good seasons,” said Mr Goodfellow.