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NEWSLETTER of February 15, 2019

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The following content has been added at finexpert:


Studies > Performance

MSCI

ESG TRENDS TO WATCH IN 2019

ESG institutional investors face both pressing challenges and opportunities in 2019. The report highlights five of them: how to deal with the significant amount of plastic waste generated; regulations focused on ESG investors; the earlier-than-expected effects of climate change; the big signal revolution and the role of corporate leadership in the age of transparency. >more

Studies > Corporate Finance

White & Case

TEN YEARS ON: THE SURPRISING RESILIENCE OF EUROPEAN LEVERAGED FINANCE

The European leveraged finance market paused for breath in 2018 after two feverish years, but a combination of new money issuances for LBOs and the rise of CLOs has kept the market stable. Investors, far from eschewing the riskier end of the lending spectrum, have been tempted up the yield curve, seeking out higher returns than those on offer in safer markets where quantitative easing has depressed yields. Encouraged by investors' desire for yield, riskier issuers/borrowers have started to demand looser terms on loans, knowing that investors, needing to deploy capital in competitive markets for deal allocations, would be more likely to accept. >more

Studies > M&A

Ernst & Young

CHINESISCHE UNTERNEHMENSKÄUFE IN EUROPA: UPDATE FEBRUAR 2019

Chinese investors are becoming less and less active in Europe: last year, the number of takeovers and company investments throughout Europe fell by 21 percent to 196, and the investment volume even shrank by 46 percent to 31.2 billion US dollars. Germany also recorded a significant decline - the number of acquisitions and investments fell from 54 to 35. >more

Studies > Risk Management

Credit Suisse

VIEWS ON THE FOREIGN EXCHANGE MARKET TRENDS – RESULTS OF THE 2019 CLIENT SURVEY

The Credit Suisse study on exchange rates and currency hedging surveyed 766 companies on the topic of currency management. The survey shows: The majority hedges currency risks completely or partially. Learn more about the reasons in the attached report. >more


Research Papers > Corporate Governance

STICKING AROUND TOO LONG? DYNAMICS OF THE BENEFITS OF DUAL-CLASS VOTING

Hyunseob Kim, and Roni Michaely
2018
Using a new dataset of corporate voting-rights from 1971 to 2015, we find that young dual-class firms trade at a premium and operate at least as efficiently as young single-class firms. As dual-class firms mature, their valuation declines, and they become less efficient in their margins, innovation, and labor productivity compared to their single-class counterparts. Voting premiums increase with firm age, suggesting that private benefits increase over maturity. Most sunset provisions that dual-class firms adopt are ineffective. Our findings suggest that effective, time-consistent sunset provisions would be based on age or on inferior shareholders’ periodic right to eliminate dual-class voting. >more

Research Papers > Corporate Finance

MUTUAL FUND INVESTMENTS IN PRIVATE FIRMS

Sungjoung Kwon, Michelle Lowry, and Yiming Qian
2018
Historically a key advantage of being a public firm was broader access to capital, from a disperse group of shareholders. In recent years, such capital has increasingly become available to private firms as well. We document a dramatic increase over the past twenty years in the number of mutual funds participating in private markets and in the dollar value of these private firm investments. We evaluate several factors that potentially contribute to this trend: firms seeking extra capital to postpone public listing; mutual funds seeking higher risk-adjusted returns and IPO allocations; and, VCs seeking new investors to substantiate higher valuations. Results provide the strongest support for the first two factors. >more