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On the money

A so-so offering from Soho House

Ellie Goulding, Nick Grimshaw, Taylor Swift and Matty Healy at Soho House. David M Benett/Getty Images

Join Soho House – or stay at home and buy the shares? According to Nimrod Kamer in Air Mail, the 50,000 or so people on the combined waiting lists of the London-based members’ club operator might be better off putting their money into its forthcoming IPO.

It may be billed as “an oasis of exclusivity and swank”, but in truth “there’s absolutely no more cool factor left” at Soho House. Following rapid growth in recent years – it now has 27 locations and 110,000 members in 10 countries – the bankers have “rolled in” and many clubs once targeted at the artsy crowd have lost their lustre.

“There are two types of [new] members: failed influencers who need a cheap gym/workspace, and finance bros who hawk crypto,” says a former member of Soho House Hong Kong. “The Hong Kong house is an expat cesspool disconnected from the local context. It has nothing to do with Hong Kong culture and seems more like an embassy of American-British hypebeast types and Sex and the City wannabes. I’ve never heard Cantonese spoken there.”

Other member gripes include the “fees for no benefits” approach during lockdown. Investors eyeing up the IPO may balk at the idea of Soho Works – sleek workspaces that Kamer calls “Soho House’s answer to WeWork”. That said, when people go back to work and travel resumes, the clubs will be there for the after-work drinks and half-price dinners for under-27s. And we have to assume that the group’s two biggest shareholders, American billionaire Ron Burkle and British restaurateur Richard Caring, “know what they’re doing”.

A buffeting for Buffett 

Warren Buffett has achieved near-messianic status in the decades since he turned a troubled textile company into a $630bn conglomerate. But The Economist sees challenges ahead for the 90-year-old Sage of Omaha’s successor as CEO, Greg Abel, who was inadvertently unveiled by a slip of the tongue at a recent shareholders’ meeting of Berkshire Hathaway.

One problem is the group’s recent mediocre performance: a flat 2019 followed by a 9% fall in operating profits in 2020. Granted, Berkshire Hathaway is a victim of its size, and one good investment no longer moves the needle, but other wounds have been self-inflicted, including big bets on Occidental Petroleum and Kraft Heinz that went sour. Apart from a stake in Apple, Buffett has also missed out on the tech boom. His hands-off management style, increasingly at odds with “command and control” corporate trends, is another concern.

Shares in Berkshire Hathaway are widely viewed as trading at less than the sum of its parts, says The Economist, and “the most forceful efforts to impose change” may come from those seeking to break up the company. “Over my dead body” would doubtless be the response of Buffett, who believes well-run conglomerates have enduring advantages such as not being associated with a given industry. As he once said: “If horses had controlled investment decisions, there would have been no auto industry.”

Should you give Pfizer a shot? 

News this week that Pfizer’s Covid-19 vaccine brought in $3.5bn of revenue and an estimated $900m pre-tax profit during the first quarter of 2021 prompted fresh scrutiny of the US drugs company’s ethics. Acknowledging its development of “an unproven technology that has saved an untold number of lives”, The New York Times nevertheless suggests that Pfizer is “disproportionately reaching the world’s rich” and providing “minimal help to the world’s poorest countries”. Information about profitability is “opaque” and, according to a health policy expert at the LSE, its contribution to Covax, a global partnership supplying vaccines to poor countries, is “a drop in the ocean”.

The FT’s Lex column is more hard-headed. The company is flourishing, it says, with a new forecast of $26bn in vaccine sales for the whole year. And its Covid-19 jab is no one-hit wonder: with approval being sought to give it to children, and the development of versions that can be stored more easily and fight variants, “it has the potential to become a lucrative long-term business”. Pfizer “has a good shot at outperforming”.