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NEWSLETTER of January 4, 2019

 

The following content has been added at finexpert:


Studies > Performance

Group of Thirty (G30)

BANKING CONDUCT AND CULTURE: A PERMANENT MINDSET CHANGE

2018 marks the tenth anniversary of the global financial crisis. Since then, the industry has devoted significant time and resources to understanding the underlying causes of its cultural breakdowns, and to implementing reforms needed to address the issues. And yet, throughout the last decade, and despite significant efforts, the industry has continued to be dogged by conduct scandals and failures of culture and governance. Trust in banks remains low. And at the same time, the scope of the issues has grown. As a result, banks have endeavored to implement various changes to improve their conduct and culture. The report focuses on two fundamental questions: 1) How much progress has the banking industry made in conduct and culture ten years on from the global financial crisis; and 2) In what areas should banks continue to press on, and what evolving questions should they be mindful of going forward? >more

Studies > Corporate Finance

PwC

WORKING CAPITAL REPORT 2018/19: NAVIGATING UNCERTAINTY

Cash is the lifeblood of any company. It’s more important than ever for businesses to optimise this fundamental aspect of financial performance if they’re to maintain a steady course in these uncertain times. Given that working capital is the cheapest source of cash, nothing is more vital than having a cash culture and good liquidity on board. If all the companies in this PwC study were to improve their working capital efficiency to the level of the next performance quartile, this would represent a cash release of €1.3tr. This would be enough for global companies to boost their capital investment by 55% – without needing to access additional funding or put their cash flows under pressure. >more

Studies > Alternative Investments

Coller Capital

GLOBAL PRIVATE EQUITY BAROMETER: WINTER 2018-19

Three-quarters of the world’s private equity investors (Limited Partners or LPs) believe that international trade disputes will harm investment returns from private equity if they continue, according to Coller Capital’s latest Global Private Equity Barometer. As for Brexit, approaching half of the world’s LPs think there will be no new opportunities for private equity in Britain’s departure from the EU. A similar proportion think the opportunity will be limited to acquiring British assets on the cheap. Only 17% of Limited Partners see opportunities from a less demanding regulatory environment, and just 13% think private equity could benefit from better export opportunities for British companies. >more


Research Papers > Corporate Finance

WHY ARE FIRMS WITH MORE MANAGERIAL OWNERSHIP WORTH LESS?

Kornelia Fabisik, Rüdiger Fahlenbrach, René M. Stulz, and Jérôme Taillard
2018
Using more than 50,000 firm-years from 1988 to 2015, we show that the empirical relation between a firm’s Tobin’s q and managerial ownership is systematically negative. When we restrict our sample to larger firms as in the prior literature, our findings are consistent with the literature, showing that there is an increasing and concave relation between q and managerial ownership. We show that these seemingly contradictory results are explained by cumulative past performance and liquidity. Better performing firms have more liquid equity, which enables insiders to more easily sell shares after the IPO, and they also have a higher Tobin’s q. >more

Research Papers >     M & A

WHICH ANTITAKEOVER PROVISIONS MATTER?

Jonathan M. Karpoff, Robert J. Schonlau, and Eric W. Wehrly
2018
Researchers disagree about which, if any, antitakeover provisions affect firms’ takeover likelihoods. Reflecting such disagreement, researchers variously use the G-index, E-index, other ad hoc indices, or selected individual provisions such as classified boards, to measure firms’ takeover defenses. In tests that account for the endogenous use of antitakeover provisions, we find that 11 of the 24 G-index provisions are robustly and negatively related to takeover likelihood, while two are positively related. Various indices used in the literature to measure takeover defense, including the G-index and E-index, relate to takeover likelihood to the extent they include this subset of provisions. >more