UK and European funds exclude Deliveroo

UK and European investors have completely ruled out Deliveroo, and data show that only four of the continent’s 18,000 mutuals have invested in the food delivery company since it made a disastrous initial public offering in March.

It was named after Deliveroo’s IPO The worst in London history after its share price fell 26 percent on the opening day. Two months later, its shares are trading at more than a third below the 390p share price, closing at 251p on Friday.

Investors spoke before the IPO saying they would do so avoid company due to concerns about the list of double-class shares, governance, and labor rules.

According to Morningstar data, the only UK-based fund he invested in Deliveroon is managed by River and Mercantile for the wealth manager AFH Group. The other three holding funds are Spain-based Enginyers Accions Europe and Morgan Stanley and Franklin Templeton are two European-based funds.

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

Almost all of the mutuals that sponsored Deliveroo are in North America, including funds from Fidelity, T Rowe Price and Federated Hermes, according to Morningstar.

Tom Powdrill, Pirc’s chief executive officer, a UK proxy advisor, said it was “striking that those closer to the action – when it comes to the list and when Deliverook does a large part of its business – invest much less.” Company based in London.

“If I were to be a U.S. investor, I think it would be worth observing the lack of domestic support for stocks,” he added.

That said, there is a growing interest from potential European investors in environmental, social and governance issues.

Colin Baines, head of investment commitment at the Friends Provident Foundation, said the coronavirus pandemic has exposed social issues such as working conditions. “Having Deliveroo in their wallets is a sure way to mark customers who may not be integrating social issues. [into investment decisions] that yes “.

Deliverook said more than a third of its stake is in investors located in the UK, including the arms of international asset managers. Morningstar’s data includes 40,000 open-ended funds from around the world, including 18,000 based in the UK and Europe.

Shares of other online food delivery companies, from Ocado to Just Eat Takeaway, have also not fared poorly in recent weeks, as investors feared the sector would lose out now as diners are allowed to return to restaurants.

But according to a recent report by Takealytics, according to a research suit that tracks food applications, the delivery appears to have “stood up well,” thanks in part to promotional activity.

Major institutional investors also expressed concern about Deliveroo’s dual-class structure, which strengthens Deliveroo’s founder Will Shu’s voting power. This share structure excludes the London Premium from the list, as some investors are unable to buy the share.

“We wouldn’t have the power to do anything [because of the rights the chief executive will hold for three years]. The CEO may want the business the way he wants it to for years, ”said Andrew Millington, head of UK shares at Aberdeen Standard Investments, before it went public.