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GLOBAL PRIVATE EQUITY WATCH 2013: STANDING TALL - WHY DISTINCTIVE PE FIRMS WILL FLOURISH

Ernst & Young
This report by Ernst & Young reviews the private equity asset class in light of intensifying competition and regulatory pressure. As the report demonstrates, PE is finding new and creative ways of growing in stature. Firms are capitalizing on their key strengths, talent and knowledge base to achieve distinction in an increasingly crowded market. >more

GLOBAL ECONOMIC OUTLOOK - 2ND QUARTER 2013

Deloitte
The second edition of the Deloitte Economic Outlook looks upon economic developments across the Eurozone, United States, China, Japan and India and contains a special on budget deficits. >more

EQUITY CROWDFUNDING AND VENTURE CAPITAL

Mergermarket / RR Donnelley Venue
For this month’s Spotlight, Mergermarket interviewed lawyers and venture capitalists based in the US to gain insight into their opinions on the potential impact of equity crowdfunding on capital markets. >more

WACHSTUMS- UND KONJUNKTURANALYSEN

ZEW - Zentrum für Europäische Wirtschaftsforschung
The newest ZEW outlook on economic conditions, indicates positive growth dynamics for the upcoming months despite the still prevalent uncertainty about the Eurozone development. >more

We updated the capital market data (multiples, betas, returns and Svensson Yield Curve) as to April 15, 2013. >more

THE ART OF RISK MANAGEMENT

The Boston Consulting Group
This study of BCG discussess the role of risk management in the aftermath of the Global Financial Crisis and highlights the increasing strategic importance of risk management for value creation in corporations. >more

We updated the finexpert market correlations. This sheet provides a comprehensive overview on main stock indices of the G7 and Emerging Markets as well as important global indices. In addition, it shows the correlations to important commodities and interest rates as 3M-EURIBOR and 10-Year-German-Govt. bond. The overall picture of the correlations provides additional information for our members on how the markets move. In addition, we’ve attached due to the recent downward jumps of the gold price a special focusing on the correlations of the Gold bullion LBM with the other usual correlations. On the first sheet we present for your convenience an overview of the gold correlations for the past 12 months increasing up to the past 120 months. On the second slide we depict the correlations on a yearly basis.  >more

MITTELSTAND AUF WACHSTUMSKURS - INNOVATIONEN FINANZIERT VON DEN MITTELSTÄNDISCHEN BETEILIGUNGS- GESELLSCHAFTEN IN DEUTSCHLAND

BVK - Bundesverband Deutscher Kapitalbeteiligungsgesellschaften e.V.
This BVK brochure highlights state-owned German private equity sponsors and their role for medium-sized companies in Germany. It introduces case studies that, for example, show how these private equity sponsors drive innovativeness. >more

Terminal Value Models - Part 3

Bernhard Schwetzler
Being the last tutorial in our series about terminal value models this video is dealing with some common pitfalls and errors in applying standard valuation techniques (March 2013). >more

We welcomed the 800th finexpert-member! (March 21, 2013)
Memberlist for non-members >more
Memberlist for members if logged in >more

In this issue we concentrate on the development of the CAPM-betas of the DAX
30 companies as well as the development of industry wide CAPM-betas since 2007. In addition, we provide a graphical description of the development of industry EV/EBIT, EV/EBITDA, EV/Sales, P/E and forward P/sales multiple over the last 4 years.  >more

STEIGENDE KURSE DANK PRIVATE EQUITY

PricewaterhouseCoopers
This study deals with the value development of private equity backed and non-private equity backed IPOs in North America, Europe and Asia. >more
 

LCR - DIE ÜBERARBEITUNG DER BASELER LIQUIDITÄTSANFORDERUNGEN

Deloitte
This white paper deals with the regulatory contents of the liquidity coverage ratio that have been set by the Basel Committee on Banking Supervision (BCBS) recently. >more

DEBT-RELATED TAX SHIELDS AND PRIVATE EQUITY: MYTH OR REALITY?

Alexander Knauer, Alexander D.F. Lahmann, Magnus Pfluecke, Bernhard Schwetzler 2013
In this paper we address the magnitude of debt-related tax shields employing a proprietary data set of 56 German leveraged buyouts (LBOs) completed between 1997 and 2011. In particular we examine the relevance and performance contribution of tax shields under different financing policies, and the economic impact of limiting tax-deductible interest based on the new tax code introduced in 2008 in Germany. We highlight that LBO tax shields are significant in terms of size, but there is little evidence for a significant performance contribution. Our results suggest that the economic impact from limiting tax-deductible interest in Germany is low for LBOs. >more 
(Interview >more)

UPDATE ARBEITSRECHT

CMS Hasche Sigle
The CMS Hasche Sigle update on Arbeitsrecht (March 2013 in German). >more

ECONOMIC SCENARIOS 2013

Roland Berger Strategy Consultants
In this publication, Roland Berger Strategy Consultants outlines its views for economic development in Germany in 2013. Contrary to several other experts, it expects economic growth for 2013 to not worsen compared to 2012. >more

mergermarket 2012 Deal Drivers EMEA

Most sectors registered a decline in full year M&A activity by value, with the overall figures rescued by a 31% surge in the value of energy mining and utilities deals, supported by the €34.4bn all share merger of Xstrata and Glencore. Industrials and chemicals was another active sector during 2012, accounting for 14.1% of deals by value and 22.3% by volume. >more

Terminal Value Models - Part 2

Bernhard Schwetzler
We´ve added a tutorial video on the extensions to Gordon Shapiro and some sanity checks for growth assumptions. >more

TIME FOR BOLD ACTION - GLOBAL BANKING OUTLOOK 2013-14

Ernst & Young
This year's edition of the Global Banking Outlook contains issues, challenges and opportunities for what Ernst & Young considers to be key components for banks. >more

REBUILDING EUROPE'S COMPETITIVENESS

World Economic Forum / Roland Berger Strategy ConsultantsThis report reviews the current situation of European competitiveness, describes a series of adopted practices and provides an outlook for future competitiveness in Europe as well as for the necessary preconditions for it. >more

mergermarket Global M&A Round-up for Legal Advisers for year-end 2012

The UK & Ireland accounted for the largest proportion of deals with 21.7% market share. >more

mergermarket Germanic M&A Round-up for year-end 2012

Germanic M&A activity amounted to €109.1bn in 2012, up 43.4% from 2011 (€76.1bn). The region accounted for 20.5% of total European M&A activity and had its busiest year by deal value since 2008 (€159.9bn). >more

Terminal Value Models - Part 1

We´ve added a tutorial video on the role of growth in the calculation of terminal values, discussing the Gordon-Shapiro model. It is the first video of a sequence dealing with particular problems on corporate valuation. We´ll try to keep up a rhythm uploading a new video every four weeks. >more

GLOBAL RISKS 2013

Oliver Wyman
Part of the World Economic Forum is the Global Risks 2013 report which is derived from an annual survey of over 1,000 experts from industry, government, academia and civil society who were asked to review a landscape of 50 global risks. Severe income disparity constitutes the global risk that respondents rated most likely to manifest over the next 10 years, while the risk rated as having the highest impact if it were to manifest is major systemic financial failure. There are also two risks appearing in the top five of both impact and likelihood – chronic fiscal imbalances and water supply crisis. >more

ENDING THE ERA OF PONZI FINANCE
BCG
Ten Steps Developed Economies Must Take. >more

2012 GLOBAL IPO UPDATE

Ernst & Young
The 2012 Global IPO Update contains analyses to worldwide IPOs of the 4th quarter 2012. It suggests a lull on the worldwide IPO market but expects growth for the German market. >more

The Impact of Credit Rating and Frequent Refinancing on Firm Value

Sven Arnold, Alexander Lahmann and Bernhard Schwetzler
SSRN Working Paper
Rating affects corporate credit costs and leverage choices. Therefore, we develop a corporate valuation model where the choice of leverage is consistent with the implied cost of debt of the rating class. We explicitly model the trigger, the consequences, and the analytical probability of bankruptcy. Further, we develop a financing policy where the firm refinances with a predefined frequency. To conclude, we develop value implications of rating and financing policy which are in line with the trade-off theory in  capital structure theory. >more

BEWERTUNG NOTLEIDENDER UNTERNEHMEN

Prof. Dr. Christian Aders
Presentation at 66. Deutscher Betriebswirtschafter-Tag der Schmalenbach-Gesellschaft für Betriebswirtschaft. >more

ESUG STUDY 2012 (GERMAN LAW ON FURTHER FACILITATING THE RESTRUCTURING OF COMPANIES)

NOERR & RolandBerger Strategy Consultants
A new survey by Roland Berger Strategy Consultants and the law firm Noerr shows that the initial experience with the new German insolvency law (ESUG) is largely positive. >more

DOES THE PROXIMITY OF PRINCIPAL CUSTOMERS AFFECT SUPPLIERS’ CAPITAL STRUCTURES?

Patrick Goettner and Peter Limbach
SSRN Working Paper
This study is the first to examine the impact of principal customers’ geographical proximity on supplying firms’ use of debt. >more

LETTING SHAREHOLDERS KNOW HOW THEIR MONEY IS SPENT

NYTimes Dealbook column
Column on a rulemaking petition urging adoption of rules that would require public companies to disclose information about their political spending. >more

DO WEALTH CREATING MERGERS AND ACQUISITIONS REALLY HURT ACQUIRER SHAREHOLDERS?

Ronald W. Masulis,  Peter L. Swan, and Brett Tobiansky
They examine the expected economic benefits of mergers and acquisitions. By studying bids that fail for exogenous reasons, which are largely free of signaling and revelation biases, they confirm the neoclassical view that takeovers are positive NPV projects for a typical bidder. Exogenously failed cash bidders significantly underperform successful cash bidders by 10.7% and exogenously failed stock bidders significantly underperform successful stock bidders by an added 15.5%, leading to combined underperformance in failed stock bids of 26.2%. >more

THE NEW BANK RESOLUTION REGIMES AND “TOO-BIG-TO-FAIL”

Federal Reserve Bank of New York - Liberty Street Economics Blog
A study on the impact of expected and actual regulation changes on CDS implied default probabilities. >more

LAND OF THE RISING YEN: JAPANESE BUYERS CONTINUE TO LOOK WEST

mergermarket
Japanese companies have long been known to hold mountains of cash. And now it’s being put to work in Europe. >more

ASIATISCHE ANLEIHEN – EINE WACHSENDE ASSET-KLASSE

Allianz Global Investors
Asian government and corporate bonds play an increasingly important role in a portfolio context (in German). >more

The Development of Multiples over the Financial Crisis

We have calculated multiples quarterly from January 2006 until July 2011. This study gives an overview of the development in the time of crisis with respect to EV/EBIT and P/E multiples; each trailing and forward. Based on 14 industries of Deutsche Börse, the Prime All Share, DAX, MDAX and TecDAX, we further derived a range of 1 standard deviation to add meaning to the multiples. >more

Sustainable Compensation Systems for Executives

Gunther Friedl | Verena Springer
The worldwide financial crisis during the years 2008 and 2009 revealed serious shortcomings in corporate governance and executive compensation. The lack of sustainability in executive compensation has been blamed for being an important reason for the crisis. During the following debate, the German Government launched the Act on the Appropriateness of Management Board Compensation (VorstAG). Moreover, the government commission of the German Corporate Governance Code (GCGC) included amendments to the code to make executive compensation more sustainable (June 2011).  >more

Tax Shield, Zinsschranke and Corporate Value

We added a short video on the role of Tax Shield and Zinsschranke in corporate valuation  (Oct 8, 2010) >more if you are a member

2-Years and 5-Years-Beta (in addition to 250-days-Beta)

One of the major problems when deriving the cost of equity via the CAPM is the “right” estimate of beta. Since almost four years finexpert provides 250 day industry betas. As other sources (as e.g. Prof. Damodaran) rely on different standards with respect to time horizon and frequency of the estimates we felt that complementing our industry beta estimates will add value to our content. Therefore we added 5 year industry-betas based on monthly returns and 2 year industry-betas based on daily returns to our Capital Market Data.
You should not be surprised to find significant differences between the different estimates:  As we pointed out in our recent “Note on Beta Estimates”, the time horizon has a major impact on the stability and reliability of the beta estimates.  Finally your choice will always get down to the same trade off:  Recent market developments are better reflected in the 250 day betas, but these estimates are more volatile than 5 year betas.
In order to provide you with a complete picture we therefore publish all three versions from now on. >more

A Note on Purchase Price Allocation

Gunther Friedl | Carola Hammer (May 2010)
>more if you are a member and logged in

Note on Beta Estimates

Bernhard Schwetzler
This note highlights some of the problems when estimating betas using German capital market data (January 8, 2010).  >more if you are a member and logged in  (Note and complete results of the analysis)

A Note on Impairment Tests

Gunther Friedl | Maximilian Bader (September 2009)
>more if you are a member and logged in

Consistent Multiple Valuation - Theoretical and Empirical Evidence

We added a video on the quality of multiples including the results of an empirical study for Germany (August 28, 09) >more if you are a member and logged in  (If you experience problems this may be due to your corporate fire wall not allowing downstreaming the video).

Cash Holdings and Corporate Valuation

We added a short video on the role of cash holdings in corporate valuation  (July 17, 09) >more if you are a member and logged in  (If you experience problems this may be due to your corporate fire wall not allowing downstreaming the video).

Bank Valuation

We added a basic note on some problems of corporate valuation with respect to banks.
June 12, 2009 >more if you are a member and logged in