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NEWSLETTER of February 22, 2019

 

The following content has been added at finexpert:


Studies > Performance

Deutsche Bank Research

GERMAN ROBO-ADVISORS: RAPID GROWTH, ROBUST PERFORMANCE, HIGH COST

Robo-advice is a new breed in asset management. Robos’ assets under management have been growing quickly in Germany. However, the market is increasingly becoming concentrated and competitive. Robo portfolios have shown relatively robust performance recently. Yet the high costs of robo-advice in Germany are a drag on returns and may alienate potential customers. Current clients, meanwhile, are mostly middle-age, higher-income men rather than millennials. >more

Studies > Performance

Thinking Ahead Institute

GLOBAL PENSION ASSETS STUDY 2019

The Thinking Ahead Institute's Global Pension Assets Study 2019 covers 22 major pension markets (the P22), which now total USD 40,173 billion in pension assets and account for 60% of the GDP of these economies. The study also looks at the seven largest markets (the P7) which include Australia, Canada, Japan, Netherlands, Switzerland, UK and US and comprise 91% of total pension assets. >more

Studies > Corporate Finance

PwC

WORKING CAPITAL MANAGEMENT IM WANDEL

For the first time in five years, the working capital performance of companies in the DACH region shows a positive trend: working capital has fallen by almost one day - from 52.4 days in 2016 to 51.5 days in 2017. The reason for this improvement is the stronger performance on the asset side of corporate balance sheets: The companies surveyed were able to reduce their inventory and receivables ranges by an average of 1.7 and 0.6 days respectively. However, the analyzed companies still release too little liquid funds for investments. >more

Studies > M & A

The Boston Consulting Group

CRACKING THE CODE OF DIGITAL M&A

To get the most value from digital acquisitions, dealmakers need to think more creatively about synergies. Less tangible sources of value — such as scientific acumen and social media influence — are critical to justifying the high price of digital assets. Acquirers must be able to tap into these sources of value to grow their own business, as well as apply their core strengths to accelerate the digital asset’s growth. >more


Research Papers > Corporate Governance

THE ROLE OF EXECUTIVE CASH BONUSES IN PROVIDING INDIVIDUAL AND TEAM INCENTIVES

Wayne R. Guay, John Kepler, and David Tsui
2018
Given CEOs’ substantial equity portfolios, much recent literature on CEO incentives regards cash-based bonus plans as largely irrelevant, begging the question of why nearly all CEO compensation plans include such bonuses. We develop a new measure of bonus plan incentives, and document that performance sensitivities are much greater than prior estimates. We also test hypotheses regarding the role of bonuses in providing executives with individualized and team incentives. We find little evidence supporting the individualized incentives hypotheses, but consistent evidence that bonus plans appear to be used to encourage mutual monitoring and to facilitate coordination across the top management team as a whole. >more

Research Papers > Corporate Finance

THE CASH CONVERSION CYCLE SPREAD

Baolian Wang
2018
The cash conversion cycle (CCC) refers to the time span between the outlay of cash for purchases to the receipt of cash from sales. It is a widely used metric to gauge the effectiveness of a firm’s management and intrinsic need for external financing. This paper shows that a zero-investment portfolio that buys stocks in the lowest CCC decile and shorts stocks in the highest CCC decile earns 5 to 7% alphas per year. The CCC effect is prevalent across industries and remains even for large capitalization stocks. The CCC effect is distinct from the known return predictors. The returns of high-CCC stocks are more sensitive to the health of the financial intermediaries than low-CCC stocks. This suggests that the CCC-based strategy cannot be explained by the financial intermediary leverage risk. >more