The week in investor relations: Vaccines required to enter Deutsche Bank HQ, secret rewards at Bridgepoint and Beijing plans new stock exchange
– Business Insider reported that Deutsche Bank will require Covid-19 vaccinations for anyone coming into the firm’s new Manhattan headquarters, set to open in late September. Anyone seeking to enter the offices at One Columbus Circle must show proof of a Covid-19 vaccination to get inside and the news site said the policy will apply to staff, vendors, clients and anyone else entering the building.
– The regular disclosure of US private equity executives’ income – ‘which dwarfs that of most other business leaders’ – often causes a fuss, noted the Financial Times (paywall). Now, though, those executives can ‘look with envy at their newly listed UK peer Bridgepoint’, where true rewards are ‘hidden from view’. In July Bridgepoint became the first private equity firm to list on the London Stock Exchange since 1994, with a £300 mn ($415 mn) offering and a market valuation that quickly rose to more than £4 bn. The FT added that although the firm’s new shareholders have already enjoyed a strong return on their investment, they ‘cannot know the full extent of management’s own returns owing to Bridgepoint’s use of a complicated structure’. While Bridgepoint states its executives’ salaries and bonuses, the paper said it does not report the amount of money individuals receive in the form of ‘carried interest’ payments, a 20 percent share of profits in the funds their firms raise and invest.
– CNN reported on China’s plan to set up a new stock exchange in Beijing, ‘giving the nation’s capital and political center more influence in the world of business and finance.’ President Xi Jinping announced the Beijing-based exchange at an international trade fair on Thursday, saying he wanted to create a venue for ‘service-oriented’ and ‘innovative’ businesses. He did not say when the exchange would be established.
– According to The Wall Street Journal (paywall) a ‘broad sell-off’ wiped about $75 bn from the value of companies that went public through special purpose acquisition companies. Citing Dow Jones Market Data analysis of figures from SPAC Research, the paper said shares in this ‘once-hot sector’ have dropped 25 percent since mid-February, highlighting ‘the risk of jumping into the latest sure bet.’
– OilPrice.com reported on what it says is a world-first lawsuit challenging net-zero claims. The Australasian Centre for Corporate Responsibility (ACCR) filed the suit with the Federal Court of Australia, challenging claims by energy giant Santos that natural gas provides ‘clean energy’ and questioning its net-zero targets. The site says this is a world-first court case to challenge the veracity of a company’s net-zero emissions targets. Australia-based gas producer and developer Santos aims to reduce its Scope 1 and Scope 2 emissions to net-zero by 2040. But the Environmental Defenders Office, acting on behalf of ACCR, will argue that Santos’ claims that natural gas is a ‘clean fuel’ and that the company has a credible pathway to net-zero emissions by 2040 ‘constitute misleading or deceptive conduct’ under the Corporations Act 2001 and the Australian Consumer Law.
– Fidelity Investments is going on a hiring spree, according to the WSJ, which reported the firm’s plans to hire another 9,000 employees this year to help its businesses keep pace with the surge in demand for stock-trading and other personal investing services. Fidelity’s latest recruitment round is its third in the past year, when millions of new investors flocked to brokerages like Fidelity, Charles Schwab and Robinhood Markets. Including the latest push, the paper said Fidelity’s total workforce is expected to grow more than 22 percent this year, to more than 60,000 employees.
– Following last week’s announcement by the UK’s Financial Conduct Authority that it could not efficiently supervise Binance, the world’s largest cryptocurrency exchange, after the platform refused to provide basic details about its operations, Binance was this week placed on an investor alert list by Singapore’s financial regulator. The Block reported that the Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, has placed cryptocurrency exchange Binance.com – but not its Singapore entity Binance.sg – on the investor alert list. The MAS investor alert list details unregulated entities that may have been wrongly perceived as being regulated or licensed by the authority. The news comes one week after Binance hired Richard Teng, the former chief regulatory officer of Singapore Stock Exchange, as CEO of Binance Singapore, adds the site. Teng also worked at the MAS for 13 years as director of corporate finance from 1994 to 2007.
– WSJ reported that, according to an analysis by University of Florida finance professor Jay Ritter, the still relatively small group of companies that have made their debut on US exchanges through direct listings have, on average, outperformed the S&P 500 and a key broader index for IPOs during the same period. In a direct listing, a company simply starts trading on an exchange with a reference price for where trading could start, but no shares are sold in advance at that price. Existing shareholders can sell their shares, but companies don’t raise any cash by going public. In general, companies that choose this route tend to be in solid financial shape because they don’t need to raise capital through a traditional IPO.
– Allbirds filed for a US IPO, according to Reuters. The footwear company, which mentions the word ‘sustainability’ 112 times in its regulatory filing, said it hopes to help pioneer a framework for companies to conduct what it called a ‘sustainable public equity offering’. Allbirds said as part of its IPO process that an independent third party assessed the company to determine whether it achieved certain ESG goals and followed best practices on climate response. Allbirds is known for the use of sustainable materials in its products.
– Despite speaking out on everything from voting rights and racial equality to transgender recognition in recent years, companies are ‘so far dodging the polarizing debate’ over abortion as some of the US’ tightest restrictions go into effect in Texas, said the FT. The ‘heartbeat’ law bans abortions after cardiac activity is detected, usually around six weeks into a pregnancy, before many women even know they are pregnant. The paper said it had contacted ‘more than a dozen’ companies that have previously spoken out against controversial legislation in Texas and elsewhere. The companies either declined to comment or did not respond to a request to comment on the new abortion restrictions. It added, however, that some smaller companies ‘had decided to take a stand.’
– CityWire reported that ARK Investment Management is to launch an ETF focusing on companies deemed to be among the ‘most transparent’ in the world. The fund will be a passive strategy with about 100 holdings in its global benchmark, it said, with chief executive Cathie Wood as the sole named manager. ‘At the heart of the strategy’ is the Transparency Index, designed by a firm called Transparency, which CityWire said is working on the benchmark in tandem with German index firm Solactive. The index contains ‘approximately 100 of the most transparent companies in the world,’ according to ARK’s SEC filing, and is based on a proprietary scoring system that looks at several categories, including the company’s reporting standards, the length of a company’s terms and conditions document (shorter being better), any litigation it has faced and the clarity of its charges.