Murray Cod Australia throws out a line to hook $400m fund
Murray Cod Australia, the fish farming minnow which has found itself just about the only aquaculture operation left on the ASX, has begun meeting offshore institutional investors to drum up support for a water fund which could grow to as large as $400 million.
That would dwarf the company’s current market capitalisation of about $107 million and be used to fund infrastructure development – ponds for Murray cod production – and holding water rights.
One investor document obtained by Street Talk suggests around $145 million of the final fund would be used for water rights, an increasingly popular alternative asset class for sophisticated investors. Sources close to the discussions about the fund, known as the Australian Sustainable Protein Fund, said it could end up with more than that depending on demand.
Josh Niland is one chef Murray Cod Australia has engaged for marketing. Nikki Short
The fund is being sold to potential investors as an “opportunity to pioneer hi-growth land-based aquaculture in Australia” with a “secure, ASX-listed tenant with strong growth and high margins”. It is also something of an ESG play, Land-based fish production is more expensive than salmon produced in the ocean, like that at aquaculture giants Huon, purchased off the bourse by Brazil’s JBS Foods for $500 million in 2021, and Tassal, which was purchased by Canada’s Cooke for $1.1 billion last year.
Murray Cod Australia is advised by HWL Ebsworth. The company’s chairman, Ross Anderson, confirmed he had met with interested parties, and said there was a significant difference in investors interested in infrastructure-like assets and those who wanted to invest in the fish farming business, which was set for higher growth. Among those showing interest in the ASPF were sovereign wealth funds with mandates on food security.
The company’s Aquna Murray Cod products are stocked in Woolworths and some Coles supermarkets, although the business has been hampered by a decision to reduce stocking levels during the COVID-19 pandemic. That has left fewer large fish to sell, although the company told investors earlier this year that it had a 250 per cent increase in spawning, and “there should be a marked increase in saleable Aquna fish in the next 18-24 months”.
In its presentation to potential investors in the ASPF, Murray Cod talks up the Murrumbidgee Irrigation Area, where it is based, noting it was infrastructure ready, a natural floodplain and a “traditional environment for this native fish” and had a reliable water supply “from Snowy Hydro and underground bores”. The company already has 50 ponds and three hatcheries in the area, along with a processing plant.
Anderson told Street Talk that there was already interest, and he expected to have $100 million in the ASPF when it launched, having already seeded it with around $20 million of Murray Cod’s own assets.
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