The week in investor relations: Airbnb to go public, investor revolt at Ryanair and Europe eyes passive strategies
– Airbnb, the home rental company, has announced plans to publicly list shares next year, reports Reuters. The firm has not revealed the kind of listing it will pursue, but it is widely expected to do a direct listing, where no new shares are made available, according to the story. The announcement comes shortly after WeWork, another member of the sharing economy, delayed its listing due to concerns over valuation and corporate governance. ‘I think it’ll be a whole different reception for Airbnb, assuming that it can show it’s a profitable business without having to lose money on marketing,’ Kathleen Smith, principal at Renaissance Capital, which provides research on the IPO market, tells Reuters.
– The BBC says Ryanair will consult with shareholders after nearly half its investors rejected the latest pay package for senior management. Only 50.5 percent of the budget airline’s investors voted in favor of the remuneration report, which includes provisions that could lead CEO Michael O’Leary to receive payments totaling €99 mn ($110 mn). A spokesperson for Ryanair says: ‘Ryanair is consulting, and will continue to consult, with its shareholders and we will report back to them over the coming year on how the board will adapt its decision-making to reflect their advice and input on all these topics.’
– Ahead of next week’s United Nations Climate Action Summit, investors managing billions of assets have called on companies to do more to fight climate change, reports CNN. In a letter signed by 515 investors managing assets worth around $35 tn, the signatories call on companies to disclosure more information about climate risks, according to the news story. ‘With the immense power and influence investors hold in our global economy, they have a tremendous opportunity and responsibility to act at the urgent pace and scale required,’ says Mindy Lubber, CEO of sustainability firm Ceres, according to CNN.
– Meanwhile, online retail giant Amazon has revealed plans to slash its carbon footprint, reports ABC News. The company has ordered 100,000 electric vans and plans to make greater use of renewable energy sources, says the news provider. ‘We’ve been in the middle of the herd on this issue and we want to move to the forefront,’ commented Jeff Bezos at an event announcing the changes, according to the article.
– The UK’s largest public pension fund by members is under political pressure to move from active to passive investment following the suspension of a star fund manager, according to an article in the Financial Times (paywall). ‘A senior executive with the £275 bn ($345 bn) Local Government Pension Scheme said government officials pressed the scheme to switch into passive management following the suspension of [Neil] Woodford’s Equity Income fund in June,’ reports the newspaper. The pension fund currently has around 60 percent of its assets in active funds, notes the FT.
– Responding to the news, a Bloomberg article highlights that Europe – which has lagged the US in adoption of passive investing – is starting to catch up. ‘[T]he disclosure reflects conversations that are taking place at pension providers, charities and other custodians of other people’s money across Europe. And while the region has been slower than the US to embrace the shift toward lower-cost index trackers, the global trend away from active managers is clearly accelerating,’ writes Bloomberg opinion columnist Mark Gilbert.