NEWSLETTER of January 22, 2021

The following content has been added at finexpert:

Alvarez & Marsal
IN DER VERÄNDERUNG LIEGT DIE KRAFT IM WETTBEWERB
Despite all the pandemic worries, German industrial companies are still doing well in an international comparison. A survey of top managers shows that three quarters of them consider their competitive position to be stable or even strengthened during the crisis. But they have fought hard to achieve this comparatively positive interim result. They have made far-reaching changes, accelerated digitization, optimized the interface to the customer and also changed their business model with numerous other measures. >more

Baker & McKenzie
IPO REPORT 2020 & KEY TRENDS SET TO SHAPE 2021
2020 has been a historic year for IPO activity — we have seen the highest level of IPO capital raising activity since 2007, with USD 331 billion raised across 1,591 listings. As COVID-19 hit the markets, IPO activity was dampened during the first half of 2020, with companies entering resilience mode and focusing on weathering the storm, both financially and operationally. Q3 saw a monumental rebound of the markets, with over 40% of the total capital raised in 2020 generated in Q3 alone. This indicates a return in market and investor confidence and a backlog of IPO-ready companies finally launching their listings on the back of market liquidity. >more

Allen & Overy
M&A INSIGHTS: Q4 2020
Deal activity across regions and sectors came to a near standstill in H1 as the pandemic spread rapidly around the globe. The effect of that has been to depress both deal value and volume for the year as a whole, down by 8% and 9% respectively. But those figures obscure an extraordinarily strong recovery in deal activity that began in the late summer and has continued through the rest of the year, with private equity funds playing a particularly active role in the turnaround. Against that background we are seeing something of a recovery in the value of cross-border transactions, which have been under pressure for some time. However deal volume for the year remains depressed. >more

World Economic Forum
THE GLOBAL RISKS REPORT 2021
The 16th edition of the World Economic Forum’s Global Risks Report analyses the risks from societal fractures — manifested through persistent and emerging risks to human health, rising unemployment, widening digital divides, youth disillusionment, and geopolitical fragmentation. Businesses risk a disorderly shakeout which can exclude large cohorts of workers and companies from the markets of the future. Environmental degradation — still an existential threat to humanity — risks intersecting with societal fractures to bring about severe consequences. Yet, with the world more attuned to risk, lessons can be drawn to strengthen response and resilience. In 2020, the risk of a pandemic became reality. As governments, businesses, and societies grapple with COVID-19, societal cohesion is more important than ever. >more

EMPIRICAL ASSET PRICING VIA MACHINE LEARNING
Shihao Gu, Bryan T. Kelly, and Dacheng Xiu
2019
We perform a comparative analysis of machine learning methods for the canonical problem of empirical asset pricing: measuring asset risk premia. We demonstrate large economic gains to investors using machine learning forecasts, in some cases doubling the performance of leading regression-based strategies from the literature. We identify the best performing methods (trees and neural networks) and trace their predictive gains to allowance of nonlinear predictor interactions that are missed by other methods. All methods agree on the same set of dominant predictive signals which includes variations on momentum, liquidity, and volatility. Improved risk premium measurement through machine learning simplifies the investigation into economic mechanisms of asset pricing and highlights the value of machine learning in financial innovation. >more

GENDER STEREOTYPES AND ENTREPRENEUR FINANCING
Camille Hebert
2020
I examine gender differences in external equity financing using administrative data on the population of start-ups in France. Female-founded start-ups are 27% less likely to raise external equity including venture capital. However, the gender funding gap reverses in female-dominated sectors, where female entrepreneurs are more likely to raise funding than male entrepreneurs. Moreover, I show that conditional on being backed with equity, entrepreneurs outperform in gender-incongruent sectors, suggesting that requirements for funding are higher for entrepreneurs that are minority in gender-incongruent sectors. The evidence is consistent with the existence of context-dependent stereotypes among investors. >more