MyFarm’s dual approach to providing investors liquidity.
MyFarm Investments, specialists in New Zealand primary sector investments, is committed to providing liquidity options for its investors. Having utilised the continuous market since 2018, their community of investors has grown accustomed to the option of liquidity that MyFarm can offer using Syndex’s software. In September 2024, MyFarm expanded its toolkit by integrating periodic trading events into its secondary market strategy for its KiwiFruit Fund Limited Partnership. This strategic addition allows MyFarm to continue fulfilling its focus on providing liquidity options, improving investor access and market transparency.
A Hybrid Liquidity Model for a Growing Investor Base
In 2024, MyFarm established the MyFarm Kiwifruit Fund with the amalgamation of 11 existing Limited Partnerships. With an asset base of $200 million and close to 600 unitholders, it presented a unique opportunity for a hybrid approach to liquidity - offering both 24/7 and periodic trading. The periodic trading events (also known to investors as ‘auctions’) run quarterly, at which time continuous trading is paused. These events are open to both existing KiwiFruit Fund investors, and to new wholesale investors following a pre-approval process.
Investor Confidence Reflected in Repeat Participation
Louise Bignall, Head of Client Relations, notices existing investors buying more units. Louise says, “These are often investors who joined us a few months ago and have since gained confidence in the fund and taken the opportunity to increase their holdings. These liquidity options allow them to do this seamlessly”.
Combining Market Mechanisms to Boost Promotion and Participation
The nature of 24/7 liquidity means it isn’t always easy to communicate activity, as buy and sell orders are placed sporadically. However, now, in combination with the periodic trading events, the MyFarm and Syndex teams are able to effectively market the opportunity to join the KiwiFruit Fund to new wholesale investors, providing increased interest and improved liquidity than the 24/7 option alone. So far, marketing efforts have included mailouts to the MyFarm and Syndex’s investor community.
Marketing Trading Events to a Broader Investor Audience
“Being able to market these events helps widen the pool of investors and brings more buyers into the event,” says Bignall. “In terms of numbers, most buyers are existing investors, however, we are seeing increased interest from new investors as the economic landscape changes. This is where the marketing ability will become even more significant.”
Educating and Supporting Investors Through the Process
To ensure that all investors are well-equipped to trade, MyFarm has implemented a robust educational campaign. This includes webinars at the time of launch, supported by how-to guides and instructional videos. Additionally, for those who cannot attend the events or feel uncomfortable in the trading environment, MyFarm offers proxy bidding services, ensuring that all investors can participate.
A Positive Investor Experience with Transparent Trading
Feedback from investors indicates that the trading platform is straightforward to use, and they appreciate the transparency and fairness it offers. “We offer proxy bidding, but the fact that so few investors use it shows how easy the trading platform is to navigate,” adds Bignall.
The trading events have been well-attended, another sign of the platform's user-friendliness and investor understanding.
Setting a New Standard for Private Market Liquidity
MyFarm’s approach to integrating its 24/7 market and periodic trading events represents a forward-thinking strategy that aligns with its focus on investor liquidity. By combining the flexibility of 24/7 access to its trading with the stability and opportunity of quarterly trading events, MyFarm has successfully enhanced liquidity options, attracted new investors, and empowered its current KiwiFruit Fund investor base. Through transparent and accessible trading mechanisms, MyFarm has set a new standard for private market trading, ensuring that liquidity is an opportunity for growth and engagement.
