NEWSLETTER of December 16, 2022

The following content has been added at finexpert:

Bain & Company
DEUTSCHLANDS BANKEN 2022: IM AUGE DES STURMS
The transformation of the 2010s is starting to pay off. Return on equity is rising for the second year in a row. But inflation, the interest rate turnaround, and the economic downturn are causing new turbulence - and demand more than ever for storm-proof business models. >more

Invesco
DIE CHANCEN ALTERNATIVER ANLAGEN: HALBJAHRESUPDATE 2022
Investors continue to face a difficult macroeconomic environment. In addition to stubbornly high inflation, rising interest rates, widening credit spreads and volatile equity markets are causing them trouble. In this environment, alternative investments can offer attractive diversification benefits. >more

PwC
EMISSIONSMARKT DEUTSCHLAND: PORSCHE BÖRSENGANG VERHINDERT SCHLECHTESTES IPO JAHR SEIT 2009
In "Issuance Market Germany," PwC analyzes all new share issues and capital increases on the Frankfurt Stock Exchange on a quarterly basis. In addition, new issues of corporate bonds by German issuers are recorded. The data on capital increases are based on information from Thomson Reuters and include transactions up to and including December 02, 2022. >more

Coller Capital
GLOBAL PRIVATE EQUITY BAROMETER: WINTER 2022-23
Coller Capital's Barometer is a unique snapshot of global trends in private equity – a twice-yearly overview of the plans and opinions of Limited Partners worldwide. This edition contains findings on how the "denomintator effect" will likely reduce the pace of PE commitments. >more

SUSTAINABLE FINANCE
Alex Edmans, and Marcin T. Kacperczyk
2022
Sustainable finance – the integration of environmental, social, and governance (“ESG”) issues into financial decisions – is an increasingly important topic. Within companies, sustainability is no longer an ancillary issue confined to corporate social responsibility departments, but a CEO-level issue fundamental to the core business. Within the investment industry, sustainability used to be the exclusive domain of “socially responsible investors” who had social as well as financial objectives but is now mainstream and includes investors with purely financial goals. This article introduces the RF Special Issue on Sustainability. It highlights three reasons for the rapid rise in sustainable finance – its financial relevance, its contribution to non-financial objectives, and investor tastes. It then summarizes the eight articles in the Special Issue, in particular drawing out their contributions to the literature. Finally, we offer ideas for future research. >more

HOW DO INVESTORS VALUE ESG?
Malcolm P. Baker, Mark Egan, and Suproteem K. Sarkar
2022
Environmental, social, and governance (ESG) objectives have risen to near the top of the agenda for corporate executives and boards, driven in large part by their perceptions of shareholder interest. We quantify the value that shareholders place on ESG using a revealed preference approach, where shareholders pay higher fees for ESG-oriented index funds in exchange for their financial and non-financial benefits. We find that investors are willing, on average, to pay 20 basis points more per annum for an investment in a fund with an ESG mandate as compared to an otherwise identical mutual fund without an ESG mandate, suggesting that investors as a group expect commensurately higher pre-fee, gross returns, either financial or non-financial, from an ESG mandate. Our point estimate has risen from 9 basis points in 2019 when our sample begins to as much as 28 basis points in 2022. When we incorporate the possibility that investors are willing to accept lower financial returns in exchange for the psychic and societal benefits of ESG, when we consider that the holdings of ESG and non-ESG index funds overlap, when we measure the ESG ratings of these holdings, and when we focus on 401(k) participants who report being concerned about climate change or who work in industries with lower levels of emissions, we find that the implicit value that investors place on ESG stocks is higher still. A simple model of supply suggests that the large majority of these benefits accrue to investors and firms, with intermediaries capturing 5.9 basis points in fees, half of which reflect higher markups. >more