Pinnacle Investment Management has taken a stake in a new boutique set up by former Blue Sky executives, after it withdrew its bid to take over management of the Blue Sky Alternatives Access Fund last year.
Pinnacle has partnered with Brisbane-based Riparian Capital Partners which invests in agriculture, water and food.
It was established earlier this year by Blue Sky real assets investment director Nick Waters. He has since been joined by a director Patrick Hayden, who was a director of Blue Sky's US subsidiary. The team also includes Brent Loeskow and Matthew Houlahan, both former investment associates in the Blue Sky Real Assets teams.
As a part of the strategic partnership, Pinnacle will give RCP capital to invest in its business and take on its insto and retail distribution.
Pinnacle has taken an undisclosed minority stake in RCP, in line with its business model.
RCP managing partner Nick Waters said: "We're particularly pleased to have the strategic support of Pinnacle and look forward to working closely with them as we grow the firm to the benefit of agricultural sector investors."
"At RCP, we focus on investments backed by real assets that are critical to the production of essential goods. We continue to see compelling investment opportunities in Australian agriculture and look forward to working with patient capital to unlock value across the sector."
Pinnacle managing director Ian Macoun said: "We are really excited to be launching this new affiliate which represents our first investment into the agricultural sector."
"We see very strong structural tailwinds to agricultural assets including water and believe the RCP team are well positioned to provide a range of institutional investors access to this growing asset class."
Last year, Pinnacle and Wilson Asset Management competed to take over the investment management for Blue Sky's Alternative Access Fund (ASX: BAF). The LIC had a 20.7% allocation to Blue Sky Water Fund.
Pinnacle entered an agreement with BAF's board around October 18. It dropped its proposed fees on November 5 to match WAM's bid before finally withdrawing the offer later that month.
Agricultural assets have been increasingly attractive to investment firms. Phil King's Regal Funds Management recently took a stake in farmland and water rights manager Kilter Rural.
Multi-affiliate Channel Capital partnered with Gunn Agri Partners in 2016. It has since closed a $200 million beef fund and announced a crop land transformation strategy.