The week in IR: REIT investing, CEO/chair roles and sustainable funds
- Most real-estate investment trusts (REITs) have a ‘significant opportunity’ to grow their shareholder base among generalist investors, according to a new report from IHS Markit. For many REITs, specialist investors account for less than half of actively managed investment. Market changes over the last 10 years have encouraged generalist investors to take more interest in REITs.
- Legal & General Investment Management, the UK-based investor with around $1.5 tn in assets, says it will begin to vote against all CEOs who also hold the chair role, the Financial Times (paywall) reported. US, France and Spain will be particularly badly affected given that around half of the companies on their benchmark indices have a CEO/chair joint role.
- The FT also noted that European investors more than doubled the amount of cash they put into sustainable funds during 2019. Data from Morningstar showed that €120 bn ($132 bn) flowed into these funds in 2019, compared to €48.8 bn for 2018. European investment firms launched 360 sustainable funds last year, with 50 specifically focused on climate change.
- Norges Bank Investment Management (NBIM), which manages Norway’s sovereign wealth fund, supports the shortening of trading hours in the UK, reported Investment & Pensions Europe. The London Stock Exchange has opened a consultation on the subject, given that European trading hours are typically longer than in North America and Asia. NBIM said shorter hours could lead to better price discovery.
- Warner Music Group plans to go public after nine years as a private company, the BBC reported. The company went private in 2011 when it was bought by businessman Len Blavatnik for $3.3 bn. Given recent growth in music sales, the IPO could see the company valued at around $6 bn. Unlike many recent high-profile IPO candidates, Warner is a profit-making company with $256 mn of net income last year.
- Elliott Management, the activist investment firm, has taken a $2.5 bn stake in SoftBank and is pushing for changes, according to The New York Times. Citing three people familiar with the matter, the newspaper said the demands ‘could include stock buybacks, changes to SoftBank’s board or increased transparency for its $100 bn Vision Fund’. SoftBank is under scrutiny after a string of investments, including WeWork, turned sour.