NEWSLETTER of December 22, 2023

The following content has been added at finexpert:

Oliver Wyman
ALL ROADS LEAD TO ROME: BLOCKCHAINS' SCALABILITY, INTEROPERABILITY AND PRIVACY JOURNEY
In ancient times, Rome was more than just the capital of an empire, it was also the nexus of connectivity and commerce, linked by a sophisticated network of roads. This is mirrored in the blockchain universe, where both public and private domains reflect these ancient pathways and side gardens, especially in financial services. Though each domain brings unique challenges akin to different terrains, they all converge towards a shared vision: an interoperable and scalable ecosystem. Today, public and private blockchains offer distinct solutions to safeguarding privacy and enabling interoperability, catering to specialized use cases. This paper offers an overview of the evolving blockchain landscape, equipping financial institutions, regulators, and policymakers with insights into the sector’s challenges and the innovative solutions developed over time. >more

World Economic Forum | Accenture
NET-ZERO INDUSTRY TRACKER 2023
The second edition of the Net-Zero Industry Tracker report provides a detailed analysis of the progress heavy industrial and transport sectors are making worldwide, in their efforts to achieve net-zero emissions by 2050. These sectors, which account for more than 40% of global greenhouse gas emissions, need multifaceted solutions that accelerate the speed of technology development, build supporting infrastructure, and raise necessary capital to finance the transformation. A robust and ambitious policy agenda, supported by collaboration across sectors and between countries is critical to align the decarbonization of heavy industrial and transport sectors with the pathways aligned with net-zero emissions by 2050. >more

Lombard Odier
ZEHN ANLAGEÜBERZEUGUNGEN FÜR 2024
Despite recent progress, the path to a soft economic landing remains difficult. Historical data argues against ruling out a recession, but we do not expect a severe downturn in the US this time. After a dramatic 2022, bonds have remained volatile in 2023. The peak in yields and a slowdown in growth would be positive for prime bonds in 2024. This would also support investor risk appetite and equity markets. However, we expect considerable volatility in the first half of 2024. >more

Coller Capital
GLOBAL PRIVATE EQUITY BAROMETER: WINTER 2023-24
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: Private market M&A activity expectations; Artificial Intelligence adoption and investment appetite; Investors’ interest in continuation vehicles, co-investment opportunities, and strategy shifts; The impact of interest rates on private credit exposures and the future PE financing outlook, as well as private wealth capital growth expectations; Future target allocation shifts as well as other key themes shaping the private markets industry. >more

FAILING JUST FINE: ASSESSING CAREERS OF VENTURE CAPITAL-BACKED ENTREPRENEURS VIA A NON-WAGE MEASURE
Natee Amornsiripanitch, Paul A. Gompers, George Hu, William Levinson, and Vladimir Mukharlyamov
2023
This paper proposes a non-pecuniary measure of career achievement, seniority. Based on a database of over 130 million resumes, this metric exploits the variation in how long it takes to attain job titles. When non-monetary factors influence career choice, assessing career attainment via non-wage measures, such as seniority, has significant advantages. Accordingly, we use our seniority measure to study labor market outcomes of VC-backed entrepreneurs. Would-be founders experience accelerated career trajectories prior to founding, significantly outperforming graduates from same-tier colleges with similar first jobs. After exiting their start-ups, they obtain jobs about three years more senior than their peers who hold (i) same-tier college degrees, (ii) similar first jobs, and (iii) similar jobs immediately prior to founding their company. Even failed founders find jobs with higher seniority than those attained by their non-founder peers. >more

CORPORATE BOND FACTORS: REPLICATION FAILURES AND A NEW FRAMEWORK
Jens Dick-Nielsen, Peter Feldhütter, Lasse Heje Pedersen, and Christian Stolborg
2023
We demonstrate that the literature on corporate bond factors suffers from replication failures, inconsistent methodological choices, and the lack of a common error-free dataset. Going beyond identifying this replication crisis, we create a clean database of corporate bond returns where outliers are analyzed individually and propose a robust factor construction. Using this framework, we show that most, but not all, factors fail to replicate. Further, while traditional factors are constructed from individual bonds, we create representative firm-level bonds, showing which bond signals work at the firm-level. Lastly, we show that a number of equity signals work for corporate bonds. In summary, most factors fail, but so does the CAPM for corporate bonds. >more