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NEWSLETTER of September 28, 2018

 

The following content has been added at finexpert:


Tutorials
QoD11

Question of doubt in corporate valuation QoD#11: Is there a difference between DCF Flow to Equity DCF and Dividend Discount models? (Bernhard Schwetzler)

This video discusses potential differences and communalities of Flow to Equity and Dividend Discount models in corporate valuation. It also gives a recommendation which of the two approaches is in general to be preferred.
(September 28, 2018). >more


Studies > Corporate Finance

Ernst & Young

GLOBAL IPO TRENDS: Q3 2018

Ongoing geopolitical uncertainties and trade issues have continued to dampen investor enthusiasm, resulting in the number of IPOs in the first nine months of 2018 (YTD 2018) falling to 1,000 globally, an 18% decrease from YTD 2017. Despite this slowdown, YTD 2018 activity remained above the 10-year average with global IPO markets raising US$145.1b in YTD 2018, a 9% increase year-on-year. >more

Studies > M&A

The Boston Consulting Group

THE 2018 M&A REPORT: SYNERGIES TAKE CENTER STAGE

The years since 2016’s seismic political events on both sides of the Atlantic have been surprisingly ordinary for the M&A market. Despite persistent uncertainty and a less favorable regulatory environment in the US, deal activity—in terms of both value and volume—remained fairly steady in 2017 compared with 2016. And the first half of 2018 brought abundant reasons for anxiety, as many feared that dizzying market plunges and escalating trade wars would suppress deal making. But a pullback did not materialize. Deal value in the first half of 2018 exceeded the first-half average for the period dating back to 2009. Somehow, dealmakers have not let themselves be diverted from their core pursuit. >more

Studies > Alternative Investments

European Fund and Asset Management Association (EFAMA)

ASSET MANAGEMENT IN EUROPE: AN OVERVIEW

This report aims at providing facts and figures on the financial assets managed through investment funds and discretionary mandates, focusing on where the assets are managed. The report is primarily based on data provided by EFAMA national member associations through a questionnaire. >more

Studies > Risk Management

Neuberger Berman

OPTIMIZING CURRENCY EXPOSURES UNDER SOLVENCY II

The Solvency II Directive (2009/138/EC) imposes a specific solvency capital charge on currency mismatches between insurance companies’ assets and liabilities. Most insurers choose to hedge the bulk of their foreign-currency exposures unless they hold a particularly strong view on currency valuations, but a 100% hedge will almost certainly fail to yield the best volatility-adjusted portfolio returns over time. >more


Research Papers > Alternative Investments

PUBLIC HEDGE FUNDS

Lin Sun, and Melvyn Teo
2017
Hedge funds managed by listed firms significantly underperform funds managed by unlisted firms. The underperformance is more severe for funds with low manager deltas, poor governance, and no manager co-investment, or managed by firms whose prices are sensitive to earnings news. Notwithstanding the underperformance, listed asset management firms raise more capital, by growing existing funds and launching new funds post listing, and harvest greater fee revenues than do comparable unlisted firms. The results are consistent with the view that, for asset management firms, going public weakens the alignment between ownership, control, and investment capital, thereby engendering conflicts of interest. >more

Research Papers  > Alternative Investments

LOW INTEREST RATES AND RISK TAKING: EVIDENCE FROM INDIVIDUAL INVESTMENT DECISIONS

Chen Lian, Yueran Ma, and Carmen Wang
2018
How do low interest rates affect investor behavior? We demonstrate that individuals “reach for yield,” that is, have a greater appetite for risk taking when interest rates are low. Using randomized investment experiments holding fixed risk premia and risks, we show low interest rates lead to significantly higher allocations to risky assets among diverse populations. The behavior is not easily explained by conventional portfolio choice theory or institutional frictions. We then propose and provide evidence for mechanisms related to investor psychology, including reference dependence and salience. We also present results using observational data on household investment decisions. >more