During the precedent quarter (Q1 2022 ending 31st of March), we have seen many institutional investors increasing or acquiring positions in indoor vertical farming stocks. Large investors such as BlackRock, Goldman Sachs, JP Morgan, Vanguard Group, and BNP Paribas Asset Management UK have all further invested in the industry thus proving their growing interest as inflation rises and the food supply chain worsens.
BNP Paribas Asset Management UK (EPA: BNP)
BNP Paribas Asset Management is the dedicated, autonomous asset management business of BNP Paribas Group. BNP Paribas Asset Management has assets under management of $612 billion (as of December 31, 2021), with more than 500 investment professionals and around 500 client servicing specialists, serving individual, corporate, and institutional clients in 65 countries. During the first quarter, the company reported the following acquisitions in the indoor vertical farming market:
- Acquired 235K shares at Hydrofarm Holdings Group Inc
- Acquired 470.7K shares at Local Bounti Corp (NYSE:LOCL) bringing its stake in the company to 0.67% (633K shares valued at USD 3.4 million)
- Acquired 592.2K shares at AppHarvest (NASDAQ:APPH) bringing its stake in the company to 5.7% (5,795K shares valued at USD 18.3 million)
As of 2021, Vanguard has more than $7.50 trillion in assets under management (AUM), second to BlackRock, Inc ($9.01 trillion AUM). 4 The company is headquartered in Pennsylvania. Vanguard is the largest issuer of mutual funds in the world and the second-largest issuer of exchange-traded funds (ETFs). During the quarter, the company acquired the following stakes:
- 627.6K shares at Local Bounti Corp (NYSE:LOCL) bringing its stake in the company to 1.34% (1,259,513 shares valued at USD 6.8 million)
- 454.4K shares at Agrify Corp bringing its stake in the company to 4.63% (1,229,752 shares valued at USD 3.1 million)
- 233K shares at Hydrofarm Holdings bringing its stake in the company to 7.2% (3,230,922 shares valued at USD 22.2 million)
The company also sold 1.4 million shares at AppHarvest (NASDAQ: APPH), decreasing its position by 32% and bringing its stake to 2.9% (2,974K shares valued at USD 9.4 million).
Millenium Management LLC
Millennium is a global alternative investment management firm, founded in 1989, which manages more than $54 billion in assets. During the quarter, the company acquired the following stakes:
- 210K shares at Agrico Acquisition Corp
- 393.9K shares at Village Farms International bringing its stakes at 0.51% (448K shares valued at USD 1.4 million)
Read also: Vertical Farming Review; May Edition
What to expect in the second quarter for vertical farming stocks?
Indeed, the second quarter has seen the FED & ECB raising their interest rates in an attempt to slow down the inflation, the Russian & Ukrainian war further affecting food production throughout the world as well as the energy prices that have been sky-rocketing for the past months. For the first quarter may companies have benefited from the inflation rates in food prices to increase their sales numbers but have also been affected by the increasing costs especially relating to energy.
As earning season edges closer, it will be interesting to see the change in positions given the current macro-economic conditions as well as the reactions institutional investors will have to the earnings of vertical farming stocks. Also, current investigation led against certain companies may further impact the positions they have should they be continued.