In this analysis, my focus will be on developing a perspective on KAP Beteiligungs-AG’s (DB:IUR) latest ownership structure, a less discussed, but important factor. When it comes to ownership structure of a company, the impact has been observed in both the long-and short-term performance of shares. Since the same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, it is a useful exercise to deconstruct IUR’s shareholder registry.

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Institutional Ownership

Institutional investors are one of the largest group of market participants and their buy-sell decisions on a company’s stock can significantly impact prices, more so, when there are relatively small amounts of shares available on the market to trade. The company hardly has institutions in its ownership structure, indicating limited concern for investors to worry about potential sell-offs that could arise due to extensive liquidation.

General Public Ownership

A big stake of 15.55% in IUR is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.

Private Company Ownership

Potential investors in IUR should also look at another important group of investors: private companies, with a stake of 84.10%, who are primarily invested because of strategic and capital gain interests. An ownership of this size indicates a strong financial backing and has the potential to influence IUR’s business strategy. Thus, investors should dig deeper into IUR’s business relations with these companies and how it can affect shareholder returns in the long-term.

Next Steps:

With a low level of institutional ownership, investors in IUR need not worry about non-fundamental factors such as ownership structure causing large impact on stock prices. However, if you are building an investment case for IUR, ownership structure alone should not dictate your decision to buy or sell the stock. Rather, you should be examining fundamental factors such as KAP Beteiligungs-AG’s past track record and financial health. I urge you to complete your research by taking a look at the following: