The Spatium x IIF Agricultural Production Fund
About
Spatium Capital is a multi-award winning and independently owned, boutique funds management firm. Founded by Nick Quinn and Jesse Moors, Spatium specialises in applying quantitative investment solutions to both public and private markets. First conceived in 2013, we set out to design and build a market-neutral strategy that would regularly quantify listed equities that are suffering from excessive greed (thereby shorting them) and those that are being treated with unnecessary fear (investing long-on these companies). With the market nuances in Australia shifting away from market-neutral strategies, we focussed attention on the long-only quantitative investment solution and launched a separately managed account in 2018. By 2020, we transformed the structure (known as the Spatium Small Companies Fund) into an unregistered wholesale managed fund. We are now also the investment manager for the Spatium x IIF Agricultural Production Fund (SIAPF); a world‑first strategy built on unique share‑farming agreements and deep partnerships with farmers. Through the IIF platform, the fund becomes one of the most diversified agricultural investors in Australia, without owning any land.
Why Invest in Agriculture?
Everyone is dependent on agriculture and food supply; it is essential for survival. Urbanisation means consumers are disconnected from food and have few ways to participate in agriculture. Farming is increasingly challenging and farmers endure disproportionate risk. Australian agricultural production is an AU $100bn industry - annually. Investing in agricultural production (i.e., not agricultural land) can generate double-digit yields. By removing the agricultural land exposure, the SIAPF seeks to achieve stable and low risk agricultural returns.
Risk Management
There are two distinct risks we manage: 1) Seasonality: agriculture is a profitable venture, but it is variable and volatile, primarily impacted by weather. We use traditional portfolio construction approaches build around diversification – geographical and sectoral to manage risk. 2) Counterparty Risk: we undertake due diligence on all potential farmers, including credit reporting and has robust legal agreements in place and title on invested items.
Why Invest
- Low correlation to equity and risk markets — offering genuine diversification
- No land ownership — a farm yielding ~4% on land value typically produces ~30% returns on the production investment alone.
- Broad diversification across cropping, livestock, aquaculture, and horticulture, as well as geographic spread across Australia (with NZ and Canada to follow), significantly reducing volatility from weather and commodity pricing.
- Aligned incentives — farmers contribute 50% of the capital, ensuring strong focus on production outcomes
- Low duration and real liquidity — with an average production cycle of 6–7 months, quarterly liquidity is supported by harvest and sale events.
- Authentic impact investing — providing non‑debt capital directly into agricultural production.
- Attractive returns — targeting 12%+ net annual returns, with performance running at roughly double this in the first six months.
