There were several media reports that Bill Gates, the owner of Microsoft and one of the richest people in the world, was now the biggest owner of Farmland in the world. The question is why he is doing so? His core strength is the world of technology and there are many opportunities in the technology world that have given a very high return in the recent past. Even if you invest in Nasdaq indices, they have gone up with the recent push on digital economy. It is interesting with this background, that Bill Gates is finding the old assets lucrative.
According to some articles, it is the quest of diversification away from his very concentrated holding of Microsoft shares. One investopedia article talks about his top stock holdings and they are all non-technology companies, the top ones being
- Berkshire Hathaway (USD 11 Billion)
- Waste Management (USD 2.12 Billion)
- Canadian National Railway Company (USD 1.54 Billion)
- Caterpillar Inc (USD 1.66 Billion)
- Walmart Inc (USD 1.4 Billion)
If you see these companies, they are mostly into non technology(ironically Berkshire being the largest owner of Apple has now Billions of dollars in technology shares) and diversified core economy sectors. Clearly Bill Gates is seeking some form of diversification, else you would have seen Amazon, Google, Apple etc in that list.
Another article talks about this specifically in terms of his real estate investments. It credits investment manager Michael Larson for his real estate investments. Michael Larson took over Bill Gates’s portfolio in 1994 and made investments in Autonation, Charles Hotel, Four Seasons and at least 100,000 acre of farmland in California, Illinois, Iowa, Louisiana, and other states. He continued to invest in Farmland throughout the years. Besides farmland, he also made investments in Phoenix Transitional Land that owns 24,800 acres of transitional land near highway in Phoenix, aimed to create a brand new residential and commercial development.
The official statement from the investment vehicle is that Bill Gates is interested in sustainable farming and is building a portfolio of assets that enable the same.
No one knows the exact reason, but clearly Bill Gates is interested in more assets than technology companies and wants to hedge his bets.