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NEWSLETTER of August 28, 2020


The following content has been added at finexpert:


Studies > Performance

Oliver Wyman
ONLINE WERTPAPIER BROKERAGE
The turbulence on the stock markets as a result of the Corona crisis drove investor activity upwards and led to new record figures. Both the number of investors and transactions increased significantly. The latest developments underline the importance of securities trading as an attractive commission-based source of income for the German banking community. Oliver Wyman estimates that more than €1 billion per year is "only" for order commissions and other brokerage provider fees, and estimates - in addition to expected sustained growth of the underlying market - an annual revenue stream of around €10 billion for the broader German securities market for private households. >more

Studies > M & A

Mergermarket
DEAL DRIVERS EMEA HY 2020
This report provides an in-depth review of M&A activity across the region, including analysis of the ongoing impact of the COVID-19 crisis. The EMEA deal market was hit hard by the spread of COVID-19 in H1 2020. At €266.6bn, aggregate deal value was down 28.1% year on year (YoY) from in H1 2019. Deal volumes fell by almost 35%, collapsing to just 2,619 transactions. The Q2 figures in particular represent the lowest quarterly totals for the region since 2009. Among the hardest hit parts of the economy were the consumer and leisure industries, while a few pre-lockdown megadeals helped to bolster Q1 figures in the financial services and industrials and chemicals sectors. >more

Studies > M & A

Allen & Overy
M&A INSIGHTS H1 2020: ADJUSTING TO ADVERSITY
The Covid-19 coronavirus pandemic has brought the global M&A market to a juddering halt and is likely to radically change dealmaking for the foreseeable future. The figures for H1 make bleak reading: global deal value fell by 41%; the number of transactions declined by 16%; megadeals over USD10 billion were down by 48%, while those over USD5bn were 25% lower. This impact was particularly severe in Q2, as the crisis peaked. “Safety first” is the watchword for most businesses. The priority is to conserve cash and protect revenue streams rather than investing in M&A. Q3 may well see these themes intensify, especially with a severe recession in prospect. >more

Studies > Alternative Investments

EY
PRIVATE EQUITY: DER TRANSAKTIONSMARKT IN DEUTSCHLAND H1 2020
Two megadeals and the corona crisis shaped the German private equity market in the first half of the year. The number of deals collapsed from 112 in the same period of the previous year to 94. This corresponds to a decline of 16 percent and marks the lowest figure since 2016. The reluctance of financial investors as a result of the corona pandemic was particularly noticeable in the second quarter: Between April and June, they only executed 38 deals, compared with 56 transactions in the first quarter. Despite the significant decline: at EUR 24.2 billion from January to June, the transaction value was more than three times higher than in the same period of the previous year. >more


Research Papers > Alternative Investments

VENTURE CAPITAL’S ROLE IN FINANCING INNOVATION: WHAT WE KNOW AND HOW MUCH WE STILL NEED TO LEARN
Josh Lerner, and Ramana Nanda
2020
Venture capital is associated with some of the most high-growth and influential firms in the world. Academics and practitioners have effectively articulated the strengths of the venture model. At the same time, venture capital financing also has real limitations in its ability to advance substantial technological change. Three issues are particularly concerning to us: 1) the very narrow band of technological innovations that fit the requirements of institutional venture capital investors; 2) the relatively small number of venture capital investors who hold, and shape the direction of, a substantial fraction of capital that is deployed into financing radical technological change; and 3) the relaxation in recent years of the intense emphasis on corporate governance by venture capital firms. While our ability to assess the social welfare impact of venture capital remains nascent, we hope that this article will stimulate discussion of and research into these questions. >more

Research Papers > Risk Management

THE CROSS-SECTION OF CURRENCY VOLATILITY PREMIA
Pasquale Della Corte, Roman Kozhan, and Anthony Neuberger
2020
We identify a global risk factor in the cross-section of implied volatility returns in currency markets. A zero-cost strategy that buys forward volatility agreements with downward sloping implied volatility curves and sells those with upward slopes - volatility carry strategy - generates significant excess returns. The covariation with volatility carry returns fully explains the cross-sectional variation of our slope-sorted portfolios. The lower the slope, the more the forward volatility agreement is exposed to volatility carry risk. >more

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