Category Archives: Investor Perceptions

ING Private Banking – Belgium

ING Private Portfolio Management is the wealth management arm of ING Private Banking in Belgium. They are global investors and their investment approach is long-term oriented. They use various instruments and model portfolios according to the client’s risk appetite as well as tailor-made portfolios. Assets under management amount to $40 billion (ING Private Banking as a group), of which approximately $11-12 billion is managed in Belgium.

Moudy El Khodr is Head of Portfolio Management, South Region at ING Private Bank. Until 2018 he was at ING Investment Management (now NN Investment Partners) managing one of Europe’s largest US Equity Income funds. He re-joined ING Investment in 2014 after three years at Petercam  where he had managed a similar strategy. From 2001 to 2011 he worked at ING Investment Management in Brussels and The Hague. He also worked at BGL (Banque Générale du Luxembourg) in asset management (1998-2001). Moudy started his career at Euronext Brussels in 1998. He graduated “cum laude” from Université Catholique de Louvain (UCL) with a Master in Economics, holds a CEFA certification and a Certificate in Risk Management from ICHEC in Brussels.

Where does ING Private Banking fit within the investment management sector in Belgium?

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Press Release – COVID-19: Impact on European Corporate Access. 76% of investors no longer attending conferences

March 13, 2020 – Investor conferences are experiencing significant falls in attendance according to a survey of European Institutional Investors conducted by Phoenix-IR, a specialist Corporate Access provider. As many as 76% of investors are no longer attending conferences.

However, although more and more people are working from home or locked down in their offices, it’s interesting to note that at least half the investment community is still engaged in physically meeting with corporate management teams.

60% of investors are still hosting one-on-one meetings in their offices. But only 49% are venturing outside to attend group breakfast / lunch presentations. Almost three quarters said they are no longer participating in reverse roadshows, with 54% of firms suspending international travel.

In terms of how investors wished to communicate with companies, investors remain quite “low tech” when it comes to their preferred method of talking to companies when direct contact is curtailed. Two thirds prefer telephone conf calls and only one third like video conf calls, partly due to the perceived technical and logistical barriers to setting these up.

In response to travel / face-to-face meeting restrictions, Phoenix-IR is hosting virtual roadshows for its clients.  In spite of the furore caused by COVID-19, investors still need to hear from corporates.

80 European-based investors managing approximately $2.5 trillion AuM responded to the survey, which was carried out over two days March 11 and 12.  They represent investors in the UK, Switzerland, Netherlands, Germany, France, Denmark, Austria, Spain, Ireland, Portugal and Poland.

Phoenix-IR is an independent European-based investor relations consulting firm specialized in helping listed companies communicate with institutional shareholders and potential shareholders throughout the U.K. and continental Europe. Phoenix-IR owns and operates www.CorporateAccessNetwork.com

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BlackRock – Larry Fink’s annual CEO letter

Focusing on climate change, BlackRock’s CEO Larry Fink, in his annual letter to CEOs published January 12, 2020, urges companies to focus more on sustainability.  He states that “Companies, investors, and governments must prepare for a significant reallocation of capital.”

Many of his comments are highly relevant for IROs.

Key takeaways:

BlackRock will not only double the number of sustainability ETS it manages but significantly, it will divest from its active portfolios those companies generating a quarter or more of their profits from thermal coal.  Mindful of the economic, scientific, social and political realities of the energy transition BlackRock will not pursue an across-the-board sale of energy companies that produce fossil fuels.

BlackRock aims to increase its actively managed sustainability assets 10X from $90 billion today to $1 trillion in the next 10 years.

Earlier in January, BlackRock joined Climate Action 100+, a group of more than 370 investment managers with a combined $41 trillion in assets. Together the campaign’s members are pressuring the world’s biggest emitters of greenhouse gases to reduce their environmental impact and improve disclosure.  BlackRock has placed environmental and climate risk among its top priorities for meetings with the public companies it owns.

“In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. If ten percent of global investors do so – or even five percent – we will witness massive capital shifts.“

“BlackRock announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities.”

“We believe that all investors, along with regulators, insurers, and the public, need a clearer picture of how companies are managing sustainability-related questions. This data should extend beyond climate to questions around how each company serves its full set of stakeholders, such as the diversity of its workforce, the sustainability of its supply chain, or how well it protects its customers’ data. Each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders.”

“While no framework is perfect, BlackRock believes that the Sustainability Accounting Standards Board (SASB) provides a clear set of standards for reporting sustainability information across a wide range of issues, from labor practices to data privacy to business ethics. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework.”

“BlackRock has been engaging with companies for several years on their progress towards TCFD- and SASB-aligned reporting. This year, we are asking the companies that we invest in on behalf of our clients to: (1) publish a disclosure in line with industry-specific SASB guidelines by year-end, if you have not already done so, or disclose a similar set of data in a way that is relevant to your particular business; and (2) disclose climate-related risks in line with the TCFD’s recommendations, if you have not already done so. This should include your plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD guidelines.”

“We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies. Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable. Given the groundwork we have already laid engaging on disclosure, and the growing investment risks surrounding sustainability, we will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.”

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Larry Fink (BlackRock) – letter to CEOs

Larry Fink, the founder and CEO of BlackRock has written his annual letter to the CEOs of the companies in which the world’s biggest institution owns shares.  In it he urges CEOs to consider the societal implications of their business decisions and to focus on their long-term plans.  “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

He highlights BlackRock’s responsibility to engage with companies because index investors have become the ultimate long-term investors and he reaffirms his belief that companies are overly focused on the short term.

He calls for companies to articulate their strategy for long-term growth and explain their strategic framework for long-term value creation. “This is a particularly critical moment for companies to explain their long-term plans to investors.”

The letter, available below in full, is well worth reading…

https://www.blackrock.com/corporate/en-be/investor-relations/larry-fink-ceo-letter

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ISS 2011 Voting Results Report – Europe

Europe wide shareholder participation has increased over the previous four years with 2011 exhibiting the highest level of turnout recorded.

The overall level of dissent has remained static over the past four years, despite turbulence within European markets.

Europe wide turnout has increased over the previous four years with 2011 exhibiting the highest turnout recorded. This is partly due to the implementation of the EU Shareholder Rights Directive and the removal of barriers to voting, as well as the increasing interest in best practice codes that seek to encourage and enhance the benefits of more active engagement through such participation.

European voter turnout at shareholder meetings 2008-2011:




Source: ISS

European dissent by theme:

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European Institutional Asset Management Survey

The 11th European Institutional Asset Management Survey (EIAMS), researched by Invesco, found that investors have increased their allocations to fixed income while reducing their equity exposure.  The 2011 survey received responses from 148 investors in 25 countries (mainly Benelux, UK, Ireland, France and the Nordics), with total assets under management of EUR 1,194 billion, or an average of EUR 8.1 billion.

For investor relations officers at public companies we believe the most interesting points are:

1 – European institutions invest most of their equity portfolios internationally while the bulk of their fixed income assets remain in their domestic markets.

2.- The flight to safety has continued with fixed income gaining more ground with investors, but last year’s freefall in equities appears to have been halted with just a small decline, and the sharp reduction in cash suggests that investors are less risk averse.

3. – Fixed income accounts for 58% of institutional portfolios’ assets, compared with 51% in the prior year.

4. – Fixed income looks to gain further ground with corporate bonds the big likely winner at the expense of government debt.  Indeed, 22% of investors are aiming to increase their fixed income component with 30% of investors increasing their exposure to corporate bonds and 31% reducing their government bond holdings.

5. – Allocations to equities have fallen slightly to 27%, down from 2009’s level of 29%, and well below the 32% average allocation reported in 2007.  UK & Ireland remain true to their traditionally high equities weightings, with shares creeping back up to 45% of portfolios this time after slipping to 44% in 2009, though they are still below the 55% weighting seen in 2007.

6. – A small net increase in equity investment is forecast and this is most likely to occur outside of domestic markets. 19% of respondents planned to boost their equity allocations against 15% who signaled an intention to sell.  More marked, though, is the likely swing away from domestic shares towards those in other European countries, the USA, Asia and other markets.  Only 11% of respondents planned to increase equities from their home market, while 21% intended to up the proportion of other European equities as well as those from Asia, while 20% planned to lift USA equity allocations and 23% aimed to boost their “other markets” stock holdings. Institutions are clearly turning away from home markets in equity and fixed income investment. Average domestic equity allocation has fallen to 18% of the total equity slice from 23.5%.

Click on the charts below for a full display.

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Dividends are back

Aggregate dividents per share for S & P 500 companies

Aggregate dividents per share for S & P 500 companies

S&P 500 dividends per share, which hit a recent low in 2010, are forecast to grow at an annual rate of 9.8% over the next three years, driven by strong earnings and large cash reserves.


S & P 500 dividend actions - 12 months ended February

S & P 500 dividend actions - 12 months ended February

Year-over-year dividend increases are up 57.1%, while decreases and omissions are down 81.7% and 74.8%, respectively.

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