An innovative almond investment
The Macquarie Investment Banking
Group (Macquarie) has been managing retail Agribusiness investments
since 2003 and is offering investors the opportunity to benefit from
this experience with the Macquarie Almond Investment 2007. The Macquarie
Almond Investment 2007 is the second Almond Investment on offer and
represents an exciting offer in a growing industry.
The Macquarie Almond Investment 2007 seeks to maximise returns and is
designed to reduce the downside risk.
The following information applies to investors who are issued Interests
before 15 June 2007.
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Potential investor benefits: |
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• |
Annual yield —
potential to earn annuity income after year three.
Almonds are an annual crop which are expected to
produce their first harvest after around three
years. |
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• |
Portfolio
diversification — almond prices have historically
had low or negative correlation to the returns of
traditional asset classes such as shares and
residential property1. |
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Large scale orchard —
your investment will form part of a large scale,
commercial almond orchard that is designed to
achieve economies of scale in an efficient, growing
industry. |
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Expert
management team — a dedicated team with expertise in
funds management and horticulture. Macquarie
provides a long term commitment to the management of
your investment. |
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An
investment that aims to reduce downside risk —
through a combination of low upfront costs and a
unique ongoing fee structure which varies with
return, so your fees are lower when returns are
lower. In addition, insurance will be sought to
cover any damage to your almond trees2. |
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Access
to a range of finance options to help fund your
investment — by borrowing up to 100% of your
application payment and your subsequent
contributions up to 30 June 2011, through a loan
facility from a Macquarie Group company or
Momentum3. |
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Tax
certainty — 100% tax deduction for eligible
investors for all project costs (for Early Growers)
through ATO Product Ruling 2007/4*. |
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Joint
venture applicants — ability to share your
investment with a non-working spouse, another
dependant or an entity like a family trust. |
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Supporting rural Australia — represents an
investment in rural Australia which will create
employment opportunities and support the local rural
economy. |
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1 |
Past
performance is not a reliable indicator of
future performance. |
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2 |
Subject to
certain conditions. |
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3 |
Subject to
the Lender’s normal lending criteria, see
Section 9 ‘Investment Loan’ of the PDS. |
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* |
If the
conditions in the Product Ruling are met.
See Section 8 ‘Tax Treatment’ of the PDS for
details. You can view a copy of the Product
Ruling above. |
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Why invest in Almonds?
Almonds are one of the most versatile nuts and
have many health benefits which are well
documented. The promotion of almonds as a
nutritional product and as an ingredient in a
wide variety of foods appears to have been
successful in expanding the market size, and
there is continued strong demand for almonds
from Asian countries. In fact, the global market
for almonds has experienced both supply and
demand growth of over 6% per annum over the last
11 years. Future consumption is expected to meet
projected global production increases.
Although the Australian industry only represents
3% of global production, it is growing rapidly.
Furthermore, Australia enjoys a number of
advantages over other producing countries, such
as a more reliable climate, consistent and
higher nut quality and seasonal advantages.
How the investment works
The
Macquarie Almond Investment provides you with the
opportunity to grow, harvest and sell almonds with
expert support at all stages of the process.
As the investor, you:
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carry
on a business of growing, harvesting and selling
almonds; |
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hold a
licence over an identifiable ¼ hectare almond lot
and rights to use orchard assets; and |
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appoint the Responsible Entity, Macquarie
Alternative Assets Management Limited as manager of
your business. |
Project Lifecycle: |
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in the
first year of the investment, your trees will be
planted and carefully looked after by a team of
experts; |
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during
the third year, bees will be introduced for
pollination and the trees should bear their first
commercial crop. Trees should reach full maturity
after approximately seven years from your initial
investment date; |
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during
the harvest, your almonds will be pooled with those
of the other investors for cracking and hulling; |
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kernels are transported to Almondco for processing,
packaging and sale. |
Location of the orchard
The orchard
will be located on prime horticultural land
approximately 18km south-east of Robinvale and 8km
from the Murray River, in the Sunraysia district of
north‑west Victoria. The site is adjacent to the 500
hectare orchard developed for the Macquarie Almond
Investment 2006.
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Who may be interested
in this investment?
This investment may be suitable to you for a
number of reasons, including if you:
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are looking to
diversify your investment portfolio; |
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want potential for
annuity income - possible after year three; |
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have adequate cashflow
to meet ongoing payment obligations; |
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are looking for
potentially tax efficient investment solutions; |
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want the potential to
earn income outside superannuation; |
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have a long term
investment horizon; |
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have reliable income
stream but limited upfront capital (if borrowing to
invest). |
Risks
As with any investment there are risks to be
considered, and as this is a long term
agricultural investment, many variables may
affect the performance of the investment. As
well as general investment risks, risks specific
to the project include agriculture and
environmental risks as well as risks associated
with price of the almonds. The risks are set out
in the Product Disclosure Statement (PDS) and as
usual we recommend you read this document and
obtain your own financial, legal and tax advice.
Macquarie Almond Investment 2007 — at a glance
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Project term |
Approximately 23 years |
|
Minimum investment |
One interest (equals one almond lot,
approximately ¼ hectare of land) |
|
Application type |
Early Growers — applications accepted on
or before 15 June 2007 |
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Amounts payable in 2007 |
The fees in the table
below are applicable to Early Growers
for the first year of the project only.
Additional annual fees apply to
subsequent years including variable
costs. You should refer to section 7
‘Fees and Other Costs’ in the PDS for
more information on fees.
|
Fee |
Amount per interest
(incl GST) |
Payable |
Tax
deductible* |
Can be
financed |
|
Application
payment |
$6,600 |
On application |
Yes - 100% |
Yes - up to 100% |
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Fixed management
and licence fee |
$1,760 |
31 October 2007 |
Yes - 100% |
Yes - up to 100% |
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Expected yield |
The first crop of the
orchard should be harvested in February
to April 2010. From this point, annual
yields are expected to increase until
the almond trees reach full maturity in
their seventh year. |
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Water supply |
The first crop of the
orchard should be harvested in February
to April 2010. From this point, annual
yields are expected to increase until
the almond trees reach full maturity in
their seventh year. |
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Investment Loan |
Two loan providers
available with flexible funding options.
The Investment Loan options for
Macquarie are listed below. For more
information on the Investment Loans
offered by Momentum, visit the Macquarie
Almond Investment website at
www.macquarie.com.au/almonds.
Macquarie Bank Limited
|
Loan Term |
Repayment type |
Indicative interest rate** |
Repayment |
Loan establishment fee |
|
1 year |
Principal only |
0% |
12 equal monthly
instalments |
1.00% of the
loan amount^^ |
|
5
years |
Principal and
interest |
8.80% p.a. |
Monthly
instalments^ |
Nil |
|
7
years |
Principal and
interest |
8.80% p.a. |
Monthly
instalments^ |
Nil |
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How to apply
Before you invest in the Macquarie Almond
Investment 2007, it is important that you read
and understand the terms set out in the PDS. To
apply, simply complete the application form
attached to the PDS above and send it direct to
Macquarie. Remember, as with any investment
decision, you should consult your financial,
legal and taxation advisers for personalised
recommendations and advice.
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* |
Assuming the conditions
in the Product Ruling are met. |
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** |
This interest rate is
indicative only and will be updated
periodically on the website
www.macquarie.com.au/almonds. |
|
^ |
The monthly repayment
instalments for each drawdown shall be in
equal amounts over the term or in such other
amounts for each month as Macquarie notifies
the investor in writing. The allocation of
monthly payments between principal and
interest will be as determined by Macquarie
and notified to the Investor from time to
time. |
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^^ |
Your Loan Establishment
Fee will be included in your Investment Loan
amount. |
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