NEWSLETTER of February 28, 2020

The following content has been added at finexpert:

Bain & Company

GLOBAL PRIVATE EQUITY REPORT 2020

Our 11th annual report shows another great year for PE. But the game is getting harder as asset prices soar and 10-year public market returns match PE returns for the first time. >more

PwC

PRIVATE EQUITY TREND REPORT 2020

In 2019, the number of private equity transactions in Europe remained at a very high level. It is now clear that private equity (PE) is moving from boom to normal, mainly because the form of financing meets investors' expectations. One of the consequences is increasingly fierce competition among PE houses for the most attractive deals. >more

McKinsey & Company

GLOBAL PRIVATE MARKETS REVIEW 2020

Updated annually, our Private Markets Review offers the best of our research and insight into private equity, private real estate, and other private markets. The report shows, amongst others, that industry performance has been strong, but manager selection remains paramount. >more

EY

GROWTH WITH PURPOSE: GERMAN TECH START-UPS CHANGING SOCIETY

The financing of the currently 100 largest German tech start-ups has improved further compared to previous years: since their foundation, they have been able to raise eleven billion US dollars from investors. Compared with the top 100 start-ups in 2018, this represents an increase of 4.8 billion US dollars or 77 percent. >more

HOW DOES FORCED CEO TURNOVER EXPERIENCE AFFECT DIRECTORS?

Jesse A. Ellis, Lixiong Guo, and Shawn Mobbs
2020
We study changes in independent director behavior and labor market outcomes after experiencing a forced CEO turnover. We find they are more willing to fire CEOs of underperforming firms, hire outside CEOs after a firing and encourage better board meeting attendance by fellow directors. We also find that shareholders of poorly performing firms react positively when experienced directors join the board. It does come with a small cost for directors, in terms of additional directorships, though the cost is not as great as that for directors who do not fire the CEO of a poorly performing firm. >more

ANTITAKEOVER PROVISIONS AND FIRM VALUE: NEW EVIDENCE FROM THE M&A MARKET

Wolfgang Drobetz, and Paul P. Momtaz
2020
New evidence from acquisition decisions suggests that antitakeover provisions (ATPs) may increase firm value when internal corporate governance is sufficiently strong. We document that, in Germany, firms with stronger ATPs, and particularly supermajority provisions, are better acquirers. Managers of high-ATP firms create value in acquisitions by making governance-improving deals. They are more likely to engage in acquisitions that reduce their own entrenchment level and less likely to invest in declining industries. Further, our empirical evidence is consistent with a short-termist interpretation. We show that takeover threats can induce myopic investment decisions, which ATPs can mitigate. They also lead managers to engage more often in value-creating long-term and innovative investing, and increase their sensitivity to investment opportunities. Our findings contribute to a growing literature challenging conventional wisdom that the agency-increasing effect of ATPs empirically dominates the myopia-eliminating effect, suggesting that a more contextual view of the value implications of ATPs is necessary. >more