Home BUSINESS British and European funds evade Deliveroo

British and European funds evade Deliveroo



The vast majority of investors in the UK and Europe have avoided Deliveroo. Data shows that since the disastrous IPO in March, only 4 of the 18,000 mutual funds in continental Europe have invested in this food delivery company.

Deliveroo’s IPO is called The worst in London history After its stock price fell 26% on the opening day. Two months later, its stock price is still more than one-third lower than the listed price of 390p, and it closed at 251p on Friday.

Investors spoke before the IPO saying they would Avoid the company Due to concerns about its dual equity listing, governance and labor standards.

According to Morningstar’s data, the only UK registered fund that disclosed its investment in Deliveroo is managed by River and Mercantile for the wealth management company AFH Group. The other three funds holding the stock are Spain-based Enginyers Accions Europa and two European-registered funds from Morgan Stanley and Franklin Templeton.

Morgan Stanley, Franklin Templeton, AFH Group and River and Mercantile declined to comment. Caixa d’Engineyers did not respond to a request for comment.

According to Morningstar, almost all mutual funds that support Deliveroo are registered in North America, including funds from Fidelity, T Rowe Price and Federated Hermes.

Tom Powdrill, head of management at Pirc, a British agency consultant, said, “It is shocking that those who are close to the action-whether in terms of listing or where Deliveroo does most of its business-are unlikely to invest”. company of.

“If I were an American investor, I think the lack of domestic support for the stock would be a cause for concern,” he added.

He said this may be due to the growing interest of European investors in environmental, social and governance issues.

Colin Baines, Investment Project Manager of Friends Provident Foundation, said that the coronavirus pandemic has brought social issues such as working conditions to the surface. “Adding Deliveroo to the portfolio is to show clients that they may not have a reliable way to integrate social issues [into investment decisions] That’s good. “

Deliveroo said that more than one-third of its equity comes from British investors, including the British branch of an international asset management company. Morningstar’s data covers 40,000 open-end funds worldwide, of which 18,000 are located in the UK and Europe.

In recent weeks, the stocks of other online food delivery companies, from Ocado to Just Eat Takeaway, have also underperformed because investors fear that the industry will fail by allowing diners to return to restaurants.

But according to a recent report from Takealytics, a research organization that tracks food applications, food delivery “seems to be performing well,” due in part to promotional activities.

Large institutional investors also expressed concern about Deliveroo’s dual structure, which allowed Deliveroo’s co-founder Will Shu to increase voting rights. This share structure excludes it from high-quality listings in London, making it impossible for some investors to buy the stock.

“We will not have the right to do anything [because of the rights the chief executive will hold for three years]The CEO can run the business as he pleases for many years,” said Andrew Millington, head of UK equity at Aberdeen Standard Investments before the IPO.

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