British and European investors are overwhelmingly avoiding Deliveroo, with data showing that only four of the continent’s 18,000 mutual funds have invested in food delivery companies since their disastrous IPO in March. has been.
Deliveroo IPO The worst in London history After that the share price fell 26% on the first day of listing. Two months later, the company’s share price is still trading more than a third below 390 pence, closing at 251 pence on Friday.
Investors express themselves before the IPO, Avoid the company The reason is due to concerns about its initial dual-tier public offering, governance and labor standards.
According to Morningstar data, the only UK registered fund to invest in Deliveroo is managed by River and Mercantile for Wealth Manager AFH Group. The other three funds that hold shares are the Spain-based Enginyers Accions Europa fund and two funds registered in Europe, Morgan Stanley and Franklin Templeton.
Morgan Stanley, Franklin Templeton, AFH Group and River and Mercantile declined to comment. Caixa d’Enginyers did not respond to requests for comment.
According to Morningstar, almost all of the mutual funds that support Deliveroo are based in North America, including funds from Fidelity, T Rowe Price and Federated Hermes.
Tom Powdrill, Head of Stewardship at Pirc, a UK proxy advisor, said: “When it comes to lists, the people close to the action are investing in the two areas where Deliveroo does most of its business. . It’s impressive that this is much less likely. “A company based in London.
“If I were an American investor, I think we have to be careful with the lack of support from domestic stock prices,” he added.
He said this could be due to the growing interest of European investors in environmental, social and governance issues.
Colin Baines, head of investment engagement at the Friends Life Foundation, said the novel coronavirus pandemic had brought up social issues such as working conditions. “Including Deliveroo in our portfolio is probably a surefire way to let our clients know that they are not integrating social issues. [into investment decisions] It is very good”
According to Deliveroo, more than a third of the company’s stake comes from UK-based investors, including the UK division of an international asset manager. Morningstar data covers 40,000 open-end funds worldwide, including 18,000 residing in the UK and Europe.
Stock prices of other online food delivery companies, from Ocado to Just Eat Takeaway, have also been slow in recent weeks.
However, according to a recent report from Takealytics, a research agency that tracks food applications, delivery “appears to be on the right track” thanks to promotional activities.
Large institutional investors have also expressed concern over Deliveroo’s dual-class structure, where Deliveroo co-founder Will Shu will strengthen his voting rights. This stock structure removes it from the London premium list and prevents some investors from buying shares.
“We have no power to do anything [because of the rights the chief executive will hold for three years]The CEO has been able to run his business the way he wants for years, ”said Andrew Millington, head of UK equities at Aberdeen Standard Investments, ahead of the IPO.
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