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Jun 09, 2023

The week in IR: OpenAI reveals IPO plans, Wall Street to face new anti-ESG wave and ESG rules tighten in EU

Our pick of the IR stories from around the web you might have missed this week

– According to Reuters (paywall), Microsoft-backed OpenAI, the company behind ChatGPT, has no plans to go public any time soon, chief executive Sam Altman said at a conference in Abu Dhabi. ‘When we develop super-intelligence, we are likely to make some decisions most investors would look at very strangely,’ he said. ‘I don’t want to be sued by ... public market or Wall Street so no, not that interested.’

– In ESG news, Bloomberg (paywall) reported that Will Hild, operating with a meager budget from a suburban home outside Washington, is gearing up for his next battle against Wall Street and the forces behind ESG investing. Hild and his tiny staff at Consumers’ Research are at the forefront of the movement, crafting adversarial campaigns that attack money managers who try to combine profits with altruistic goals by using ESG metrics to help decide where to invest. Backed by powerful right-wing operative Leonard Leo, Hild is part of a network of conservatives committed to defeating ESG, many of them opposed to efforts to mitigate climate change.

– Meanwhile, according to the Financial Times (paywall), agencies that rate businesses and investment funds on their ESG credentials may face fines for conflicts of interest under new EU rules aiming to regulate the fast-growing industry for the first time. The proposal, to be announced by the European Commission next week as part of a crackdown on ‘greenwashing’, will require ESG rating agencies – including those from outside the bloc – to certify with the EU’s financial regulator. The agencies will be required to divest from any conflicting activities, such as consulting or offering insurance to businesses they rate, and risk being fined if conflicts of interest persist – a rule observers said would force some agencies to change their practices.

– US investment giant BlackRock is acquiring Kreos Capital, a private debt manager with significant activity in Israel, including providing credit for more than 100 Israeli companies, Calcalist reported. The terms of the deal were not disclosed, but the purchase price is estimated by Calcalist to be around $400 mn. The transaction is expected to close in the third quarter of 2023. Kreos Capital’s activity in Israel is managed by co-founder and general partner Raoul Stein, who will remain in his position. Since its inception in 1998, Kreos Capital has committed more than €5.2 bn ($5.6 bn) across more than 750 transactions in 19 countries, to more than 550 pan-European and Israeli high-growth companies in the technology and healthcare sectors.

– In crypto news, the US Court of Appeals for the Third Circuit ordered the SEC to explain whether it intends to decline Coinbase’s request, provide the reasons for such a decision or provide a timeline of when it expects to come to a conclusion, Forbes reported via Coindesk. ‘Rules of the road, from legislation or rulemaking or both, must come before enforcement actions. That is why we petitioned the SEC for rulemaking nearly a year ago in the first place,’ Paul Grewal, chief legal officer at Coinbase, posted to Twitter. ‘We continue to believe the SEC could not be proceeding with litigation against our industry, like the case filed against us today, if [it] had not already decided to deny our petition for rulemaking.’

– In people moves, GE announced this week that Steve Winoker has been named chief IRO and vice president for GE Aerospace, effective immediately. In this role, Winoker is responsible for communicating the vision and value of GE Aerospace with its shareholders and the financial community. GE chairman and CEO and GE Aerospace CEO Lawrence Culp said, ‘When I came to GE, Steve was one of the first people I recruited. He has built trust and confidence across our investor base, simplified our disclosures and communicated our company’s transformation with clarity and candor.’
Winoker said: ‘GE Aerospace’s team is special, our technology and customer missions matter, and my team and I will continue to provide a voice for our investors and analysts while helping them with their investment processes as clearly and usefully as we can.’


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