Institutional Asset Manager Newsletter 19.04.24

Proxy voting opportunities increase

Proxy voting season is upon us when shareholders get to flex their stewardship muscles and attempt to direct company boards on a range of environmental, social and governance (ESG) issues.
This year we can expect the usual round of resolutions targeting emission reduction plans at major global corporates, unless – as is the case with ExxonMobil - the board has blocked the motion, raising issues of what the FAIRR Initiative calls "escalating corporate behaviour towards shareholder proposals".
The 2024 season is also notable for frustration among institutional investors who have identified inconsistency in the voting activity of their asset managers. The FAIRR Initiative - a collaborative investor network that raises awareness of the ESG risks and opportunities in the global food sector - reports that one stewardship figure at a UK asset owner analysed its passive mandates and found that it had defeated itself as managers voted in opposite directions.
Unsurprisingly, UK asset owners are trying to tackle the issue of misalignment in stewardship policies, and some are pulling back voting in house.
As institutional investors attempt to gain better control over their stewardship activities, retail investors are also finally getting more opportunity to get their voices heard at AGMs.
This week we report that trading and investment platform eToro has extended its proxy voting feature to all stocks listed on its platform "after seeing massive engagement from users".
Dan Moczulski, UK Managing Director, eToro, says: "Whilst institutional shareholders have long been able to influence boards, executives and the direction of businesses, retail investors have not always been given the voice that they deserve. However, with the explosion in retailing investing that we’ve seen in recent years, this is changing."
As Moczulski says, proxy voting is a critical part of equity investment and it is essential that retail investors can have a real impact as shareholders. And while their institutional counterparts struggle to move the dial despite their significant clout, and as corporates push back against their investors, individuals could make a real difference to this and future proxy seasons.
In other news, artificial intelligence is making further inroads into the financial sector, this time helping FX traders.
C8 Technologies, the London-based fintech founded by former BlueCrest Capital Management partners Mattias Eriksson and Ebrahim Kasenally, has launched an FX hedging platform using "advanced systematic trading models to help businesses easily and effectively manage their currency exposures".
The firm tells us the platform uses machine learning and statistical models to predict future FX movements, helping users "quickly craft customised hedging solutions that align precisely with their needs".

Gill Wadsworth, Editor
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