Alpha-Centric ESG Research

Kyle Rudden

Two days ago the U.K. Financial Reporting Council announced 125 successful signatories (aka "not greenwashers") to the revised U.K. Stewardship Code. Signatories are integrating stewardship and ESG (Environmental, Social, Governance) factors into investment decisions, to high standards.Whilst this is ostensibly limited to U.K. pension assets, ramifications are more far-reaching than it might at first appear (one indication is the number of North American and Asia Pacific signatories, in addition to the expected European names). More specifically, the broad relevance is because it:<ul>
<li>Affects firms doing business with U.K. asset managers/owners not just the managers/owners.</li>
<li>Is a quasi-blueprint for similar anti-greenwashing initiatives taking root in the U.S. and Asia.</li>
<li>Greenwashing is having an increasing impact on stocks prices (e.g., DWS Group last month).</li>
</ul>This is one battle in an emerging global war on greenwashing. The U.S. SEC has its own agenda to fight greenwashing and Asia isn't far behind (e.g., regulators in Japan stepping up scrutiny). There is more to come, and a lot to learn from this including who is (and is not) on the signatory list.

Two days ago the U.K. Financial Reporting Council announced 125 successful signatories (aka "not greenwashers") to the revised U.K. Stewardship Code. Signatories are integrating stewardship and ESG (Environmental, Social, Governance) factors into investment decisions, to high standards.Whilst this is ostensibly limited to U.K. pension assets, ramifications are more far-reaching than it might at first appear (one indication is the number of North American and Asia Pacific signatories, in addition to the expected European names). More specifically, the broad relevance is because it:
Affects firms doing business with U.K. asset managers/owners not just the managers/owners.
Is a quasi-blueprint for similar anti-greenwashing initiatives taking root in the U.S. and Asia.
Greenwashing is having an increasing impact on stocks prices (e.g., DWS Group last month).
This is one battle in an emerging global war on greenwashing. The U.S. SEC has its own agenda to fight greenwashing and Asia isn't far behind (e.g., regulators in Japan stepping up scrutiny). There is more to come, and a lot to learn from this including who is (and is not) on the signatory list.

The War on Greenwashing: UK Stewardship Code "Successful Signatories" Has Broader Implications

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/insignia-financial-ltd" target="_blank" data-smartkarma-citation="entities:12349:1" rel="noopener">Insignia Financial (IFL AU)</a> IE considers CC Capital’s scheme offer at A$4.80 fair and reasonable, as it is within its valuation range of A$4.49 to A$5.08.</li>
<li>The key scheme conditions are shareholder, FIRB and APRA approval. Regulatory approvals should be forthcoming, and the scheme vote is low-risk.</li>
<li>The offer is attractive, particularly as peers have derated. At the last close and for a 28 April payment, the gross/annualised spread is 2.8%/19.1%.  </li>
</ul>


The Insignia Financial (IFL AU) IE considers CC Capital’s scheme offer at A$4.80 fair and reasonable, as it is within its valuation range of A$4.49 to A$5.08.
The key scheme conditions are shareholder, FIRB and APRA approval. Regulatory approvals should be forthcoming, and the scheme vote is low-risk.
The offer is attractive, particularly as peers have derated. At the last close and for a 28 April payment, the gross/annualised spread is 2.8%/19.1%.  


Insignia Financial (IFL AU): Scheme Vote on 13 April

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>After last year, XP screens better versus its global wealth manager and broker peer group on most valuation metrics, yet we remain concerned about share overhang and the competitive climate</li>
<li>Itausa’s NAV discount is narrow, a potential sell signal; Itausa has historically provided discounted exposure to its second largest holding XP, but its XP exposure is now heavily diluted</li>
<li>The global wealth manager screen indicates that UK wealth manager Quilter stands out for its value attributes, especially on PE, market capitalisation to revenue and AUM to market capitalisation ratios</li>
</ul>


After last year, XP screens better versus its global wealth manager and broker peer group on most valuation metrics, yet we remain concerned about share overhang and the competitive climate
Itausa’s NAV discount is narrow, a potential sell signal; Itausa has historically provided discounted exposure to its second largest holding XP, but its XP exposure is now heavily diluted
The global wealth manager screen indicates that UK wealth manager Quilter stands out for its value attributes, especially on PE, market capitalisation to revenue and AUM to market capitalisation ratios


XP (XP US) – Despite the Share Price De-Rating, Better Value to Be Found Elsewhere

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>UK wealth manager Quilter PLC (QLT LN) is reportedly set to receive takeover bids from at least four different suitors, according to the Daily Mail. One of them is Natwest.</li>
<li>Interest in Quilter is not anything new: market share, investments in technology and a new platform make it appealing, in spite of headwinds for the industry.</li>
<li>My 136p TP is based on an average of comps-based P/E multiples. Considering valuation and potential interest, I would be long the shares.</li>
</ul>


UK wealth manager Quilter PLC (QLT LN) is reportedly set to receive takeover bids from at least four different suitors, according to the Daily Mail. One of them is Natwest.
Interest in Quilter is not anything new: market share, investments in technology and a new platform make it appealing, in spite of headwinds for the industry.
My 136p TP is based on an average of comps-based P/E multiples. Considering valuation and potential interest, I would be long the shares.


United Kingdom

Quilter is a leading UK-focused wealth management company that provides financial advice, investment solutions, and wealth management services to over 500,000 clients. The company offers a wide range of products including pensions, ISAs, and onshore bonds, along with various investment options. Quilter is headquartered in London, United Kingdom, and was founded in 2007, though its origins trace back to 1771.

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Quilter (QLT LN)

The War on Greenwashing: UK Stewardship Code "Successful Signatories" Has Broader Implications

Telegraph from European front in global war on greenwashing. U.K. names stewardship victors ("not greenwashers"). Many notable casualties. Anti...

Kyle Rudden

Insignia Financial (IFL AU): Scheme Vote on 13 April

Regulatory approvals should be forthcoming, and the scheme vote is low-risk. At the last close and for a 28 April payment, the gross/annualised...

Arun George

Potential Interest in Quilter

Deal activity in the sector from both trade and financial buyers continues, despite macro-related weaker markets YTD. Quilter seems attractive due...

Jesus Rodriguez Aguilar

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The War on Greenwashing: UK Stewardship Code "Successful Signatories" Has Broader Implications

Telegraph from European front in global war on greenwashing. U.K. names stewardship victors ("not greenwashers"). Many notable casualties. Anti...

Kyle Rudden

Insignia Financial (IFL AU): Scheme Vote on 13 April

Regulatory approvals should be forthcoming, and the scheme vote is low-risk. At the last close and for a 28 April payment, the gross/annualised...

Arun George

XP (XP US) – Despite the Share Price De-Rating, Better Value to Be Found Elsewhere

XP remains at risk of downgrades for consensus estimates and share overhang is a valid concern; Itausa, historically a vehicle for diluted XP...

Victor Galliano

Potential Interest in Quilter

Deal activity in the sector from both trade and financial buyers continues, despite macro-related weaker markets YTD. Quilter seems attractive due...

Jesus Rodriguez Aguilar