US asset manager Blackrock increases its stake in Kerry Group

Blackrock Inc, the US-based investment firm, has increased its shareholding stake in Kerry Group to over 4% after it invested more than €120m in Kerry shares throughout July. Blackrock Inc is the world’s largest investment firm with over $4.7 trillion under management as of the end of June 2015.

BlackRock now has significant shareholdings in a broad range of Ireland’s listed agri-food companies including Kerry (4%), Glanbia (0.5%), Aryzta (1.74%), Origin Enterprises (0.7%) and Greencore (1.15%).

This latest investment now makes Blackrock the third largest shareholder in the Tralee-based global food giant. Kerry Co-operative Creameries Ltd remains the largest shareholder with just under 14% followed by another US asset management firm, Capital Group, with a 5.6% stake.

Kerry share price has strengthened by more than 20% since the beginning of the year to over €68, giving the group a market capitalisation of more €12bn. Institutional investors such as banks, insurance companies, private equity groups and asset management firms account for a combined 55% of Kerry shares while retail investors account for a further 31% of shares. The remainder is held by Kerry co-op.

Attractive

Over the past four years, shares in Irish agri-food plcs have become increasingly attractive to institutional investors. The underlying fundamentals for food companies are very positive as the world seeks to increase food production by 70% over the next four decades to feed a population projected to reach nine billion by 2050.

As a result, the value of Ireland’s listed agri-food companies has increased by a combined 160% over the past three years as more and more private equity and hedge funds look to invest.

As institutional investors continue to broaden their portfolios, it is a welcome positive for Ireland’s agri-food plcs looking for the capital necessary if they have expansion or an acquisition in mind.