When a young goFARM founder Liam Lenaghan studied the wealthiest names in agriculture, he discovered a secret that has guided his investment decisions ever since.
Solid farming practices were essential, but not enough to make them household names.
"The secondary drivers are the things that people always cite: ruthless cost control and attention to detail, timing, debt funding appreciating assets, rapid adoption technology, all those things were present," Mr Lenaghan said.
"But the common attributes of the extreme wealth creation activities were land-use change and capturing property rights."
Examples of land use change, he said, were extensive properties in northwest New South Wales that had been transformed into dryland cropping and then irrigated cotton farms.
Property rights might be fishing licences or water rights.
"On every back road that you drive up in rural Australia, you find underutilized assets," Mr Lenaghan said.
"I thought that was a great shame and there are lots of losers with under-utilized assets: those that own them, the communities in which they're held and, of course, the Australian economy and its position in the world.
"Being able to identify underutilized assets and transform them, I think, delivers a lot of wins for everyone."
Those wins have come thick and fast since goFARM was founded in late 2013. It owns or manages about 70,000 hectares across New South Wales, Victoria and Tasmania, which includes around 5500 hectares of orchards.
GoFARM has deployed over $500 million in equity, with about $1 billion in assets under management and employs more than 100 people.
There's a very clear set of criteria for each investment: transformative, plant based, mechanised and preferably non-perishable.
Partly because it's what he and the Costa family partners in the business know well, goFARM is never involved in livestock.
"We're both confident in our knowledge base and expertise and haven't strayed from it, and we think there's very little downside in plant-based industries," Mr Lenaghan said.
"Whereas, perhaps, there are challenges and headwinds in both intensive and extensive livestock systems, all the trends in dietary shifts views about environmental impact in greenhouse gases, animal welfare, etcetera, etcetera.
"I'm not making a statement that intensive livestock or extensive livestock are bad for the environment or bad for the planet or bad for anyone, just that there are potential threats to those business models which will impose additional costs and challenges in time."
GoFARM prefers crops that can be harvested with as little labour as possible and avoids highly perishable crops.
Nuts fit the criteria nicely and goFARM raised eyebrows recently, acquiring 7000ha across 25 irrigated dairy farms with the intention of planting almonds.
"Go back three years ago and basically, as a generalisation, the whole district was for sale," Mr Lenaghan said of the northern dairy regions.
"Everyone was looking at it as a dairy problem, and they didn't want to be dairy farmers."
It opened the door for large-scale investment and goFARM recognised the region's fertile soils, water entitlements, nearby labour sources, processing facilities and markets as opportunities.
"There's lots of things if you're prepared to look at it as something other than dairy," Mr Lenaghan said.
"So, we have set about acquiring assets there with the view that there's another use for some of those resources.
"We're not dairy farmers, so we're transitioning. We're planting our first two commercial orchards there as we speak. Will we be successful? Time will tell."
He was quick to say that goFARM was not buying those farms to strip them of their water.
"Whenever any change occurs, there's always lots of rumours and one was that we're buying water to ship it all down the river to our almond orchards," Mr Lenaghan said.
"That is not the case. It's a different pool of investors with a different strategy, which is to own the water that's already existing there with those farms and use it locally, and that's what we're doing."
Already, goFARM had invested heavily on soil remediation and water-efficient sub-surface irrigation systems.
It has dug 7000 soils pits across its properties to guide amelioration strategies to optimise productivity and resilience of its natural capital. The focus was very much on the long-term.
"Philosophically, we're looking at building assets that we're happy to hold forever," Mr Lenaghan said.
"Because if that's the mindset then, at some point, someone else will want to own it, so that creates the exit path in itself.
"If you're trying to be a cheeky property flipper, at some point you're going to get caught."
Of course, that meant securing patient capital from investors who understood the long game and Mr Lenaghan said the core of goFARM's backing came from 20 to 25 Australian family offices and high net worth individuals.
In addition, goFARM has a separately managed account for a US endowment fund and a joint venture with a US fund manager.
Mr Lenaghan said international investment in Australian farmland was essential to achieving the National Farmers Federation's $100b target.
"I think anyone who hasn't invested in Australian agriculture that's anti-foreign investment needs to think about their position," he said.
"I'm not opposed to it, they can't pick up the farm and take it with them.
"Australian agriculture effectively has been funded by foreign capital for the last 200 years."
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