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Kiwifruit investment

Fund looking to put up to $30m into Gisborne.

An extra $50 million to $100 million of investment is set to enter the kiwifruit industry, with Gisborne earmarked for about a third of that.

The private equity fund, established by origin Capital Partners, which comprises of Paul Jones (Zespri deputy chair), Lain Jager (ex-Zespri chief executive), Craig Greenlees (ex-Zespri chair) and Dominic Jones (ex-banker), will invest exclusively in SunGold kiwifruit orchards.

“Basically, there are three ways you can do that,” Origin Capital Partners managing partner Dominic Jones said.

“You can buy an orchard, you can build it from bare land or you buy a green orchard and you convert it to SunGold — we'll do all three of those.

“The model is that we raise a fund, $50m to $100m and once we have raised that, we will deploy it across those asset classes.

“Where it gets interesting is, it will be quite heavy in Gisborne. Traditionally kiwifruit growing has been 85 percent Bay of Plenty. We'll do a lot lower than that, about 60 percent.

“The reason for that is we will have substantial holdings in both Gisborne and Kerikeri.”

The fund had already purchased three properties, two of which were in Gisborne.

“We've bought an existing orchard in Gisborne and we've bought some bare land in Gisborne, which we are going to build an orchard on.”

That would mean more jobs for the area, Mr Jones said.

“Kiwifruit is labour intensive. There is a lot of growth in kiwifruit in Gisborne anyway and we are a part of that. Once we are deployed we won't be the largest kiwifruit portfolio in the country but we will be up there and we are very bullish about Gisborne. We like it as a kiwifruit growing area, as long as you get good soil and access to water, the long summers and light hours and temperature.”

Mr Jones said at present about four percent of SunGold came from Gisborne.

“For us it will be more like 20 or 30 percent of our portfolio.”

“This is a fund open to private investors, with a minimum investment of $100,000. The fund itself, once deployed, will have about 15 orchards across the country. This model allows a stake in a portfolio with multiple orchards in multiple locations, rather than being exposed to a singular orchard.”

That would help spread the risk of investment and provide investors with access to scale.

“So, we will raise $50m to $100m plus debt for a portfolio of $100m to $200m.”

“For a number of reasons, kiwifruit is in a very strong position for investment and that's going to continue. This is an avenue for investors to get involved in that.”

Already quite a lot of inquiry was coming from Gisborne.

“We are getting a lot of inquiry from provincial communities and we will shortly be announcing a first close for funding in the early new year.”

“Applications are open until January and there is still space but investors should get in touch quickly, as allocation will be awarded on a first-in first-served basis.”

Mr Jones said the fund would have the option to acquire Zespri shares and would likely do so.

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