@occamlogic, it says in their prospectus that they've secured 5.9% yield for existing portfolio which is valued at $38m. Then they'll sell allocations from additional water purchases to generate 7-8% yield.
I think water is a bit toppy at present, but looking at the number of permanent crops planted in the last 12-18 months, the water price increase is completely justified. I suspect with the growing demand of Australia food and wine, that water has much higher to run. So a capital appreciation of at least 5% + 7-8% yields should generate 12%+ returns! I wouldn't mind that at all...!
I agree that Duxton's funds haven't been overly exciting in recent years, but they are an Ag-investor, not a typical LIC. Thus, I would think their alpha is quite impressive when comparing to other agri-funds.
Very interesting IPO indeed though, first to market! I like what I see thus far given bond, equity yields are killing me!
