2013 New IPO Opens Dairy Sector to Retail Investors

Media Release

Thursday 14 November

2013 New IPO Opens Dairy Sector to Retail Investors

New Zealand’s leading dairy farm manager MyFarm today launched an initial public offer (IPO) of shares in the first new dairy farm investment to be immediately quoted on its new securities trading platform, MyFarm Trading.

The IPO of GCF Investments Limited will for the first time give New Zealand retail investors access to both a MyFarm syndicate investment, and a facility to trade that investment, overcoming one of the principal barriers to investment in the dairying sector.

GCF Investments Limited is a collective investment vehicle (CIV) formed to enable smaller investors to indirectly and passively invest as little as $20,000 in the MyFarm dairy syndicate, Gold Creek Farm Limited Partnership, which is purchasing a 620 cow property 17 kilometres north east of Gore.

Gold Creek Farm Limited Partnership will take control of the property mid--season, and investors will benefit from this season’s record Fonterra forecast Milk Price of $8.30/kg MS.

They also gain exposure to Southland, one of the country’s most productive dairy farm region.

On settlement of the farm purchase, shares in GCF investments will be quoted on MyFarm Trading (www.mfx.co.nz).

By early next year, MyFarm expects to have four other dairy farm syndicates’ CIVs quoted on the exchange.

These CIVs have total assets of $6.15 million, an average of 28 investors each, with individual investments ranging from the minimum $20,000 to $250,000.

MyFarm Director, Andrew Watters says the creation of MyFarm Trading, which is powered by the Unlisted trading platform, opens up dairy farm investment to many more New Zealanders, increasing the industry’s access to capital and in turn creating liquidity for dairy farm investors.

“Investors and their advisors have been asking for access to our sector but they’ve struggled with the long term nature of the investments.

With MyFarm Trading, shareholders and investors will have a market to buy and sell shares via approved brokers.

“MyFarm Trading will also offer smaller investors an opportunity to gain a diversified exposure to the dairy farming sector, which over the last 20 years has delivered a compound gross annual return of 13% per annum.

“To put this in perspective, $10,000 invested twenty years ago in dairy farms operated by MyFarm would now be worth $85,000, well ahead of the $67,000 that would result from a $10,000 investment in the NZX all--share index and the $35,000 from an investment in government bonds,” Andrew Watters says.

Andrew Watters says presentations on Gold Creek and MyFarm Trading to the New Zealand broker community have been positively received.

“Financial intermediaries tell us many of the barriers to entering dairy farm investment have been addressed with the creation of this new platform.” David Wallace, director of Unlisted’s manager Armillary Private Capital, says MyFarm Trading is the first time that the Unlisted operating platform has been used to provide the engine for a completely separate market.

“A major issue for shareholders and investors in widely held businesses and syndicated investments has always been liquidity, transparency and standards of governance.

“Unlisted was designed to address these issues in a low--cost environment.

Through the MyFarm Trading platform, MyFarm is providing an opportunity for investors to buy or sell shares in an open market and with that are committing to maintaining good governance which will in turn be of benefit for investors.”

ENDS

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