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Unigrains’ IAA 80 index outperforms broader markets

Over 10 years the IAA 80’s average annual growth rate significantly outperformed the MSCI, with the IAA 80 up 6.1 percent versus a 0.3 percent decline for the MSCI.

Unigrains’ latest IAA 80 index report showed that listed European agri-food businesses outperformed the broader European market in Q1.

The index, consisting of 80 listed agri-food stocks in Western Europe, was up 6 percent over the first three months of the year compared with 4.8 percent for the MSCI Europe.

“The indicator was supported by positive earnings releases by its stocks for 2016, in an encouraging economic environment,” according to the report.

The strong quarter helped recoup losses from a slowdown in 2016. The IAA 80 gained just 5.5 percent in 2016 compared to the MSCI’s 15 percent. The report cited upbeat economic indicators in Europe, the US and emerging markets as a boost for the broader markets last year.

Over 10 years, however, the IAA 80’s average annual growth rate significantly outperformed the MSCI, with the IAA 80 up 6.1 percent versus a 0.3 percent decline for the MSCI. The ‘Lead 11’ and ‘Big 29,’ representing the 40 companies with the largest market cap in the index, were the driver of that outperformance, while the remaining companies lagged the MSCI index over the same period.

The MSCI weighted index consists of 437 Western European stocks with a market capitalization of €15 billion ($16.3 billion), while the IAA 80 is made up of 80 stocks with a €50 million ($54.3 million) market cap.

Whether through buyouts, mergers, recapitalizations or the like, many of the companies on the index IAA 80 have been influenced by private equity in some way, including Heineken, Unilever, Diageo and Nestle, to name a few.

Diageo, for instance, recently named private equity specialist Javier Ferrán as its new chairman. Heineken meanwhile is slated to purchase UK pub operator Punch Taverns alongside private equity firm Patron Capital Advisers for a reported £305 million (€359 million; $390.2 million) in a deal slated to close by August 2017.

Unigrains declined to comment on the report.