Investors focused on environmental, social and governance (ESG) characteristics should keep their eyes peeled for potential long-term opportunities amidst the number of initial public offerings (IPOs) being floated this year, says Kames Capital investment manager Craig Bonthron.
Scores of businesses are coming to market in the US and elsewhere, with big names such as Uber already available, while others such as plant-based protein manufacturer Beyond Meat also getting investors’ attention.
Beyond Meat is currently trading at nearly four times its IPO price of $25 (€22.3) – but there are a number of other listings in the pipeline investors should be aware of, says Bonthron, who manages the Kames Global Sustainable Equity Fund.
“More and more investors are interested in sustainable investing and are looking at sustainability as a key factor when making their investment decisions,” he says.
“As part of this, we are seeing increasing interest in companies which are aiming to – or are already – making positive changes to the world, be it at an environmental level or otherwise.”
The portfolio has highlighted three potential standout names with a sustainable edge to watch out for among the firms scheduled to list this year:
- Slack, a cloud-based “software as a service” productivity tool. Hailed as one of the fastest growing companies in the world at the moment by Bonthron, it is expected to float with a value of around $17 billion – “but given the current appetite for these sorts of issues, we wouldn’t be surprised if it comes in much higher”, the fund manager said.
- AirBnB, according to Bonthron, its sustainability comes from the fact that “by leveraging existing assets (houses and flats) and making them available to more people”, it reduces “the need for hotel building globally which is very carbon intensive”. It is currently valued at around $40 billion.
- Robinhood, a no fee trading platform currently valued at $5.6 billion following a private funding round. With over five million accounts, Bonthron says it has “revolutionised online trading”.
Kames Capital is a UK-based firm operating out of Edinburgh and London, currently managing around £37.2 billion (€41.9 billion) of assets.
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