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NEWSLETTER of July 12, 2019

 

The following content has been added at finexpert:


Studies > Performance

Mergermarket / Toppan Merrill

THE RISING IMPORTANCE OF BOARD DIVERSITY

Many prominent shareholders, such as institutional investors and PE firms, are putting pressure on the companies they own to report on the diversity characteristics of their board members and to increase the number of women and other groups on their boards. And while many companies are responding to this pressure and creating roadmaps to improve their board diversity, significant barriers remain. To find out how companies are currently approaching the issue of board diversity, Toppan Merrill commissioned Mergermarket to speak with three leading experts as well as one public company executive. >more

Studies > Corporate Finance

KfW Research

UNTERNEHMENSBEFRAGUNG 2019 - KREDITZUGANG: FINANZIERUNGSKLIMA TROTZT DER KONJUNKTURELLEN ENTWICKLUNG

The financing situation of companies in Germany remains extraordinarily positive. The companies have high internal financing capacity, low interest rates for loans and relaxed credit guidelines from German banks. According to this year's business survey, which KfW conducts annually together with several leading German associations, the proportion of companies reporting difficulties in accessing credit is now 8.9%. Since 2012 this figure has fallen by about one third. In contrast, 60.6 % of companies report that access to credit is fairly "easy".  >more

Studies > M & A

KPMG

DEAL CAPSULE JULY 2019: TRANSACTIONS IN CHEMICALS & LIFE SCIENCES

In the first half of this year, the transaction volume of mergers and acquisitions in the chemical and life sciences industries increased. The volume of deals announced in the first six months amounts to USD 385 billion. Compared to the previous year ($238 billion), this is an increase of 62 percent. This increase is due in particular to several blockbuster deals. The life sciences sector alone recorded five transactions, each with a volume of more than 10 billion US dollars. The strongest M&A activities are still to be found in the USA and China. This is shown by a KPMG analysis based on figures from Thomson Reuters.  >more

Studies > Alternative Investments

West Monroe Partners

DIGITAL AT THE SPEED OF PRIVATE EQUITY: HOW TO INCREASE EBITDA THROUGH DIGITAL INVESTMENTS IN THE MID-MARKET

Digital transformation is fundamentally altering the way most industries do business. And in the sky-high valuation environment that has defined the PE market in recent years, the need to identify innovative and effective investment angles to create value has never been more pressing. Looking ahead, it is the ability of PE firms to develop digitally-led investment theses, carry out effective digital diligence, and deliver on their strategies that will separate the industry’s best and weakest performers in the years to come. >more

Studies > Alternative Investments

CMS Hasche Sigle / FINANCE

PRIVATE EQUITY PANEL FRÜHJAHR 2019

For the Private Equity Panel, the FINANCE editorial team, together with the law firm CMS Hasche Sigle, interviews senior investment managers from more than 50 leading private equity houses in Germany three times a year about their current market assessment. The report compiles the most exciting statements on the business prospects of their portfolio companies, the attractiveness of certain sectors and the financing environment. >more


Research Papers > Corporate Governance

SELECTING DIRECTORS USING MACHINE LEARNING

Isil Erel, Lea Henny Stern, Chenhao Tan, and Michael S. Weisbach
2019
Can algorithms assist firms in their decisions on nominating corporate directors? We construct algorithms to make out-of-sample predictions of director performance. Tests of the quality of these predictions show that directors predicted to do poorly indeed do poorly compared to a realistic pool of candidates. Predictably poor performing directors are more likely to be male, have more past and current directorships, fewer qualifications, and larger networks than the directors the algorithm would recommend in their place. Machine learning holds promise for understanding the process by which governance structures are chosen, and has potential to help real-world firms improve their governance. >more

Research Papers > Corporate Finance

TRANCHING IN THE SYNDICATED LOAN MARKET AROUND THE WORLD

Douglas J. Cumming, Florencio Lopez de Silanes, Joseph A. McCahery, and Armin Schwienbacher
2019
Loan tranching allows banks to manage risk and facilitate firm financing, which may be essential for firms that cannot access investors from stock markets. We analyze the determinants and benefits of loan tranching by pooling the tranches of individual loans to create the largest cross-country sample of syndicated loans, covering more than 150,000 loans from multinational and domestic firms. We find that, in addition to market, deal, and borrower characteristics, legal and institutional differences impact loan tranching. Strong creditor protection and efficient debt collection increase the probability of tranching and reduce tranche spreads, ultimately promoting firms’ access to debt. We also find evidence that tranching facilitates the financing of multinational firms abroad due to the transfer of legal and cultural institutions to foreign subsidiaries. Overall, our results suggest that tranching plays an important role in reducing a country’s financial development gap and promotes firms’ access to debt. >more