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NEWSLETTER of December 27, 2024


The following content has been added at finexpert:


Studies > Performance

Natixis
2025 INSTITUTIONAL OUTLOOK: WASH. RINSE. REPEAT.
Institutional investors had reason to be satisfied with 2024 results: Markets in Asia, the US and Germany produced double-digit returns. Most other European markets produced solid single-digit results. Global growth projections came in at a healthy 3.1%. Inflation inched closer to 2% targets. And after a cycle of 11 rate hikes in 24 months, interest rates were on their way down. All this in a year when 51% of institutions had thought recession would be inevitable. Those fears have faded for many and the number of institutions anticipating a recession dropped from 51% in 2024 to just 30%. Now 64% forecast a soft landing in their home region in 2025. >more

Studies > M & A

Goldman Sachs
2025 M&A OUTLOOK
For over a year, capital markets have sought clarity on two common bottlenecks for M&A: monetary policy and regulation. With these dynamics normalizing, a generational technology disrupting industries, sponsors seeking liquidity, and a growing desire from corporates to transform their portfolios through M&A, we expect significant upside potential for dealmaking next year — but with a healthy dose of volatility as capital markets navigate “known unknowns” in the form of tariffs, geopolitics, and more. >more

Studies > Alternative Investments

M&G Investments
GLOBAL REAL ESTATE OUTLOOK 2025: A NEW CHAPTER BEGINS
Appetite for real estate investments is continuing to rise, given most global markets have reached a turning point, with capital values largely stabilised and some having begun their recovery phase. As we enter a new cycle, we believe lower entry prices, coupled with strengthening rental growth, make for attractive return potential. We see ripe conditions for investors to leverage structural sector tailwinds, underpinned by supply constraints and increasing demand. However, as we expect the market recovery to be uneven, backing the right asset in the right place is likely to be the key to outperformance. >more

Studies > Macro

Robeco
2025 OUTLOOK: THIS IS NOT A LANDING
The US faces uncertainty under Trump 2.0, and Europe needs the kind of radical changes already seen in US exceptionalism. Our base case for asset class returns sees equities rising in single digits amid a backdrop of elevated real bond yields and an overvalued US dollar whose safe-haven status is being gradually eroded. A key trend in 2025 will be transition investing, where we see rapid growth in products as decarbonization gains momentum. Nature action should also gain in importance following the success of the COP 16 biodiversity summit. >more


Research Papers > Corporate Finance

PRIVATE EQUITY AND FINANCIAL STABILITY: EVIDENCE FROM FAILED BANK RESOLUTION IN THE CRISIS
Emily Johnston Ross, Song Ma, and Manju Puri
2022
We investigate the role of private equity (PE) in the resolution of failed banks after the 2008 financial crisis. Using proprietary failed bank acquisition data from the FDIC combined with data on PE investors, we find that PE investors made substantial investments in underperforming and riskier failed banks. Further, these acquisitions tended to be in geographies where the other local banks were also distressed. Our results suggest that PE investors helped channel capital to underperforming failed banks when the “natural” potential bank acquirers were themselves constrained, filling the gap created by a weak, undercapitalized banking sector. Next, we use a quasi-random empirical design based on proprietary bidding data to examine ex post performance and real effects. We find that PE-acquired banks performed better ex post, with positive real effects for the local economy. Our results suggest that private equity investors had a positive role in stabilizing the financial system in the crisis through their involvement in failed bank resolution. >more

Research Papers > Corporate Finance

CORPORATE LOAN SPREADS AND ECONOMIC ACTIVITY
Anthony Saunders, Alessandro Spina, Sascha Steffen, and Daniel Streitz
2024
We investigate the predictive power of loan spreads for forecasting business cycles, specifically focusing on more constrained, intermediary-reliant firms. We introduce a novel loan-market-based credit spread constructed using secondary corporate loan-market prices over the 1999 to 2023 period. Loan spreads significantly enhance the prediction of macroeconomic outcomes, outperforming other credit-spread indicators. The paper also explores the underlying mechanisms, differentiating between borrower fundamentals and financial frictions, with evidence suggesting that supply-side frictions are a decisive factor in loan spreads' forecasting ability. >more

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