Farming for Yield with FarmCap: Discovering Alpha in Niche Alternative Fixed Income

Planting the Right Tree for Lasting Wealth

Wealth isn’t built by saving alone—it’s built by investing strategically and harnessing the power of compounding. As the Chinese proverb goes, “The best time to plant a tree was 20 years ago. The second-best time is now.” Warren Buffett echoes this: “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

But not all trees—or investments—are equal. In today’s market, the real opportunity lies in identifying exceptional investment managers who consistently deliver high-yield, low-volatility outcomes. These are the gems.

Challenging Conventional Thinking

Many wealth managers remain anchored to traditional approaches, offering 6–9% p.a. returns without exploring smarter, lower-risk alternatives. Forward-thinking investors seek emerging, high-performing funds that aren’t yet mainstream—but are delivering premium results.

Ask your wealth manager:

• “What emerging funds have you reviewed recently—and what did you discover?”
• “How are you staying ahead of best-of-breed opportunities?”

How to Identify a Gem Investment Manager

Here’s what to look for:

• Meet the team: Engage directly or through a trusted advisor.
• Go beyond the panel: Many top-performing funds operate off-panel by choice or due to size.
• Review real performance: Focus on actual returns, not targets. Ask about losses, defaults, recoveries, durations, distributions, and return of capital
• Demand transparency: Request credit papers and assess diligence, ethics, and thought process.
• Ask tough questions: Gauge openness and integrity.
• Understand deal flow: How many deals do they reject—and why?
• Seek proof: References from investors, referrers, and borrowers.
• Size isn’t everything: Larger funds often face pressure to deploy capital into riskier deals. Not everyone wants to be a $1B+ fund nor can they maintain a premium with a sustainable competitive advantage.
• Check ASIC compliance: Look for independent trustees and investor-first governance.
• Do your homework: Are they trustworthy?
• Aligned interests: Do they invest in their own deals? If not—run.

True gems are excited to meet you. They want to grow their FUM with high-quality investors.

Why Settle for Less? The Power of Compounding

Consider this:

• 9% annual return: $1M grows to $3.6M in 15 years.
• 12% annual return: $1M grows to $5.47M in 15 years.

That’s a 51% difference—potentially shaving years off your retirement timeline. And the 12% return may come with a stronger risk profile. That’s a gem.

FarmCap’s Competitive Edge

We specialise in a niche, underserved market—loans to Australian farmers secured by agricultural real estate. Why?

• Banks are slow and conservative: We’re fast, focused, and motivated.
• 1st mortgage loans capped at 60% LVR: Often lower, providing strong downside protection. We also invest in 2^nd mortgages at higher yields with clear exits.
• Independent valuations: Conducted by panel approved, specialised agricultural valuers with ‘as is’ valuations not hyped up projected values.

Deep Sector Knowledge = Smarter Decisions

• We’ve assessed over 2,000 deals and visited most farming regions across Australia.
• Our loan book has delivered 13.5%+ gross yields, with 50–55% average LVR and 100% capital return—no losses, no formal recoveries.
• Our secret? Rigorous due diligence (i.e. smarts and hard work) plus active loan management equals no surprises.

Solving Problems Banks Can’t

• Shorter-term funding needs: Banks prefer long-term loans; farmers often need seasonal or bridging finance for 6-18 months.
• Smaller loans: Banks often won’t touch sub-$2M deals—we jump out of bed for them.
• Forward-looking approach: We lend against land value and future income, not just historical profitability.

Uncovering Gems Others Miss

• Last month: 65 deals rejected, 6 approved.
• We see 50–70 opportunities monthly via a trusted referral network built over many years
• We travel to meet farmers— recently we travelled 18 hours farming for yield, over two days to assess two deals near Rockhampton and Cairns in prime agricultural regions.
• Both farmers were initially grumpy, frustrated and untrusting but after un-rushed face-to-face time on farm, they would barely let us leave their kitchen table after too many lamingtons and licks from the dogs.
• They were underserved by banks due to loan size, term, earnings history and lack of understanding and skill. We saw potential where others didn’t and often understand farm businesses much better than banks.
• The gems were uncovered: A curated $500K and $2.2m first mortgage investment opportunity at a 35% and 39% LVR respectively, returning 12% to investors with clear pathways to an exit in 12 months.
• Win-win for the farmer with a swift, knowledgeable, empathetic and commercial funder helping solve a problem and creating long term value for their families.
• Agricultural land is Australia’s best-performing real estate sector—yet under appreciated by investors. Its our job to explain it (and yes it does sell).

Smart Money Is Moving: Dig Deep, Find the Gems

The best opportunities aren’t always obvious. They require effort, insight, and a willingness to challenge convention - farming for yield. We’re seeing a growing shift of investors moving from traditional funds to FarmCap. They’re choosing smarter, more targeted investments that accelerate wealth creation—without the volatility of equity markets or higher risk fixed income.