Investor Collaboration Legal Opinion

The Aotearoa New Zealand Stewardship Code commissioned leading law firm, Chapman Tripp, to prepare a legal opinion summarising the competition law framework relevant to investor collaboration and providing guidance for investors considering collaboration. You can see the full legal opinion here.

Collaborative engagement is an important way for investors to use their experience and perspectives to influence both companies and the wider financial ecosystem. Research by First Sentier MUFG Sustainable Investment Institute has found collaborative engagements can be three times more effective than unilateral engagements. But, before investors collaborate it is important to consider competition and cartel risks. The following questions can guide that consideration:

1. Does the collaboration involve competitors or potential competitors?

2. Through the collaboration, will competitors be reaching an agreement or understanding (even informal)?

3. Is there a risk the agreement could involve cartel conduct or otherwise have the purpose or likely effect of substantially lessening competition in a market?

For more information on these questions and areas that competition law risk may arise, please see the full legal opinion. Note the opinion is limited to competition law considerations and the conduct described as lawful from that perspective could still give rise to other legal issues that are not addressed in the opinion.