The rise of financial investment and common ownership in global agrifood firms

Abstract

Financial investment in the food and agriculture sector has grown in recent decades, including investment in equity-related funds that invest in or track the performance of a range of publicly traded transnational agrifood companies. At their height in recent years, equity-related investment funds accounted for around one third of financial investment in the sector. Despite their significance, investment in the agrifood sector via these types of investment funds has received much less academic and policy attention than other types of financial investment, such as farmland acquisition and commodity speculation. This paper examines the rise of equity-related investment in the agricultural sector and analyzes its implications for the food system. It provides an overview and analysis of the available data on these investment vehicles, including their holdings (i.e. the companies in which they invest) and ownership (i.e. the investors who own shares in those companies). This data shows a rise in common ownership of large agrifood firms by large asset management companies. The paper makes the case that this new pattern of investment in agrifood firms by large asset management firms has the potential to contribute to the already concentrated market power in the agrifood system.