Porsche's IPO is causing blood pressure to rise among fund managers, stock traders and bankers around the world.

An almost mythical brand, charged with history and horsepower - all this magically attracts investors and overrides criticism of the problematic company and management structure.

When the investment banks involved are currently drumming up the market for Porsche, the subject of governance is on everyone's lips, as those involved report.

Christian Muessgens

Business correspondent in Hamburg.

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Inken Schoenauer

Editor in business, responsible for the financial market.

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Gustave parts

Business correspondent in Stuttgart.

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For most wealth managers, pension funds, and other large investors, however, their much-vaunted ESG strategy becomes a bargaining chip when it comes to being in the IPO of the year.

According to the goals, the investment should not only take into account the environment, i.e. environment (E), and social standards (S), but also good corporate governance (G).

Problem case Volkswagen

The Porsche parent company Volkswagen has long been considered a problem in this regard.

Intricate corporate structures and a lack of independence on the supervisory board are difficulties that are now also evident at Porsche AG and are exacerbated there by the dual function of the CEO.

Oliver Blume leads the sports car manufacturer and the parent company VW in personal union.

The fact that large parts of the capital market see the associated conflicts of interest but only shrug their shoulders is “a certain irony” given the boom in ESG issues, as one investment banker involved openly admits.

In any case, there is a lot of interest in the initial public offering, or IPO for short: "When I call investors and want to talk about Porsche, everyone picks up the phone."

Investors duck away

A survey conducted by the FAZ among banks, asset managers and other financial institutions, in which they were asked: “How do the governance difficulties associated with the Porsche IPO fit into the context of your ESG goals? From the Norwegian sovereign wealth fund to the US investment company Blackrock, which has more than 10 trillion US dollars in assets under management, to the Qatar Investment Authority, major shareholder of VW and potential anchor shareholder of Porsche AG: Everywhere there is a contradiction between one’s own ESG Strategy and a possible investment in the sports car manufacturer only "no comment".

The explanation in some places is that one does not comment on individual values.

Other companies have been given mandates, such as the Landesbank Baden-Württemberg ( LBBW ), which states on request: "Please understand that we, as the bank accompanying the IPO, cannot comment on your question for compliance reasons." all financial institutions have developed comprehensive ESG strategies to respond to the growing sensitivity of customers and investors.

The reaction of Deutsche Bank is particularly striking.

Since September 1, there has been a dedicated "Chief Sustainability Officer" who reports directly to CEO Christian Sewing.

According to their own statements, sustainability now plays an important role in the institute.

It acts as the accompanying consortium bank for the Porsche IPO.

The answer to the FAZ's query as to how this IPO fits in with their own ESG strategy: "Deutsche Bank has been mandated as European retail coordinator for Porsche's IPO."

This places strict limits on communication.

"We hope for your understanding, but we as Deutsche Bank will therefore not be able to comment on your questions." Statements from other consortium banks such as Commerzbank , BNP Paribas or from global coordinators such as JP Morgan and Goldman Sachs are very similar.

Some industry representatives are unofficially on record that VW and Porsche are already "sort of bending over" the governance.

Difficult dual role

VW and Porsche boss Blume sees no difficulties in his dual role.

Only some investors are interested in this topic, he said in a recent interview.

"If you explain it correctly, it will be understood." The management of the group and the operational management of a brand complement each other ideally, he even thinks the link is necessary.

Responsibilities are neatly separated by separate teams from the companies involved in the IPO, VW, Porsche AG and Porsche SE, the holding company of the Porsche and Piëch shareholder families.

Business success for investors is much more important than governance.

"They are well aware that Porsche has a very robust business model with a good track record for many years, even in times of crisis."