Argyle Water Access Fund

The Argyle Water Access Fund (the ‘Fund’) has been established to acquire 100% of the issued share capital of Argyle Water Access Pty Ltd (‘Argyle Water Company’), which will acquire Units in the Argyle Water Fund in accordance with its constituent documents.

The Argyle Water Fund was established in August 2012 to invest in the long-term ownership of Australian Water Entitlements (also known as water rights or water shares). It is well-established and actively managed by a highly experienced team with the objective of generating non-correlated investment returns from its participation in Australia’s regulated ‘cap and trade’ water markets. The Argyle Water Fund seeks to capitalise on the anticipated escalating demand for freshwater as a vital but increasingly scarce input to Australian agriculture, the development of more sophisticated water markets over time, and from ongoing productivity gains and progressive changes in sustainable water use within Australia’s irrigated agriculture sector.

The Argyle Water Fund delivers significant benefits for regional Australia. It provides an alternative source of capital to assist in the development of Australia’s water markets and high-value irrigated agricultural industries. As a non-land holder and regular seller of water in spot and forward markets, the Argyle Water Fund provides irrigation farmers with a new means to mitigate annual water supply risk and manage irrigation water expenses across seasons. 

The Fund is the avenue by which Australian investors can access the Argyle Water Fund, which is otherwise closed to Australian wholesale investors. 

An investment in the Fund offers Members the following benefits:

• a unique financial product that offers portfolio diversification benefits due to its low correlation with traditional financial markets;
• access to an existing diversified Water Entitlement portfolio at scale, which is managed to generate income from Water Allocation sales and from a range of Water Entitlement leases to top-quartile irrigator counterparties;
• access to a highly experienced team of investment professionals with decade-long experience in deploying and managing institutional capital in the Australian water market, including through several cycles of Australia’s climate from floods to droughts;
• scale and sophistication in terms of Water Entitlement acquisition and portfolio management across Australian water markets;
• diversification of Water Entitlements across a number of geographies, river zones and agricultural industries;
• active and disciplined management of Water Allocation sales and Water Entitlement leases to derive annual yields; and;
• potential for capital growth through the appreciation of a portfolio of scarce Water Entitlements over time.

Entitlement rental income

A proportion of the water entitlements held by the Fund are leased out to qualified irrigators over multiple year periods. The irrigators receive the water allocated to the entitlements each year.

The Water Fund receives fixed rental income (indexed to CPI) irrespective of changing rainfall and water demand in those years.

Water sales income

The water allocated to the balance of the Water Fund’s entitlements is sold forward or in spot markets throughout the year to derive annual income. 

Daily private treaty bid/offer water markets exist in the river regions in which the Fund is invested.

Capital gains

Over time we anticipate the value of water entitlements held by the Fund will appreciate reflecting their scarcity and the increasing productivity of water use over time.

Argyle’s Water Fund is invested in the ownership of a diverse portfolio of water entitlements - the perpetual rights to receive annual allocations of consumptive water from specific water resources across Australia.

Argyle actively manages the water entitlement portfolio to generate annual incomes from water sales and leasing. The net income generated is distributed to Fund investors annually.

By purchasing their water entitlements, Argyle provides irrigation farmers with capital to develop their farm’s productivity. This enables farmers to invest in their operations, develop and access new food and fibre supply chains, new storage and handling facilities and create secure jobs and regional economic diversity.

Over the past decade, in the regions in which Argyle invests, the value of water entitlements have been bid higher reflecting their scarcity and the increasing productivity of water use by farmers over time.

We anticipate these drivers will continue to generate growth in the value of water entitlements in future.

It’s important to note that water entitlement asset appreciation typically occurs over multiple-year periods. Like most investment assets, it is not assured, or regular. Past performance is not a guarantee of future performance.

Returns to the Argyle Water Fund are not correlated to other investments.

Water entitlements are genuine diversifying alternatives with fundamentally different return drivers to shares, bonds, commercial property and infrastructure.

Our target return is to achieve 10% to 14% per annum net after fees, over a recommended five to-seven year holding period. That return will comprise annual income and anticipated capital growth over time.

Capital appreciation stems from the scarcity of these assets. There are only so many water entitlements on issue in each river system (and groundwater aquifer). Progressive productivity gains in irrigated agriculture mean that over time, irrigation farmers are prepared to pay more for water as their key input. By design, Australia’s ‘cap and trade’ water markets are encouraging water use to move from lower-value to higher-value crops.

In aggregate and over time, those more productive farmers are able to afford a higher price for water as their key input. This rising trend tends to be capitalised in water entitlement values, which are key to accessing annual water allocations. 

This website is operated on behalf of Argyle Capital Partners Pty Ltd ABN 36 634 933 029 (Argyle). The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Argyle recommends that, before making an investment decision, you seek professional advice from a suitably qualified adviser. While all reasonable care has been taken in producing this information, Argyle does not warrant the accuracy, adequacy or completeness of the information, nor does Argyle undertake to keep this website updated. Changes in circumstances after publication may affect the completeness or accuracy of this information. To the maximum extent permitted by law, Argyle disclaims all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness and reliability of the information on this website, and to seek professional advice where necessary. Past performance is not a guarantee of future performance. Argyle does not accept responsibility for any loss or damage, however caused (including through negligence), which you may directly or indirectly suffer in connection with your use of the website or any linked website, nor do we accept any responsibility for any such loss arising out of your use of, or reliance on, information contained on, or accessed through, this website. To the maximum extent permitted by law, Argyle disclaims any such representations or warranties as to the completeness, accuracy, merchantability or fitness for purpose of this website or the information it contains. Argyle does not warrant the availability, functionality or performance of the website or that the website is suitable for any particular purpose or has any performance, functionality or security features except as required to be provided by law.