NEWSLETTER of January 29, 2021

The following content has been added at finexpert:

J.P. Morgan
2021 LONG-TERM CAPITAL MARKET ASSUMPTIONS
The 25th annual edition explores how the policies adopted to tackle the COVID-19 crisis will affect the next cycle – and how investors can craft a new portfolio for a new decade. Returns are constrained in many markets. But investors can draw on expanded opportunity sets to harvest the returns they need. >more

BCG
SHAREHOLDER-ENGAGEMENT: ZWISCHEN ANGRIFFSLUST AKTIVISTISCHER AKTIONÄRE UND NEUEM SELBSTVERSTÄNDNIS INSTITUTIONELLER INVESTOREN
In February 2020, shortly before the start of the COVID-19 crisis, we analyzed the level of exposure of companies in the DACH region to campaigns by activist investors. After rapid ups and downs on the capital markets in the course of 2020, the cards have reshuffled: Compared to the beginning of the year, the risk to companies from activist campaigns has increased significantly. >more

ValueTrust
EUROPEAN CAPITAL MARKET STUDY: DECEMBER 31, 2020
ValueTrust has published the seventh edition of the European Capital Market Study (as of December 31, 2020), which is issued semi-annually. In our European Capital Market Study, we show the cost of equity for ten different sectors according to four different methods. >more

PwC
DEALS WATCH GERMANY: M&A-AKTIVITÄTEN VON STRATEGISCHEN UND FINANZINVESTOREN
COVID-19 pandemic, "lockdown" and political-economic risks have led to significantly fewer deals being announced between investors and German companies so far in 2020 than in the previous year. In particular, companies from the North American and Asia-Pacific regions invested less than in 2019. By contrast, a new high was recorded in private equity investments, which are less exposed to strong fluctuations. >more

PRIVATE EQUITY BUYOUTS AND WORKPLACE SAFETY
Jonathan B. Cohn, Nicole Nestoriak, and Malcolm Wardlaw
2020
This paper presents evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly traded U.S. firms. We find that firms experience fewer OSHA safety violations after buyouts and that a larger decline in injury rates is associated with an increased probability of exit via IPO. Employment reductions after buyouts are concentrated in relatively low-injury-risk establishments. Overall, our results suggest that buyouts improve workplace safety and that PE acquirers benefit from this improvement. We explore possible causes of these changes through interviews with executives of companies acquired in buyouts and through cross-sectional analysis. >more

FINTECH BORROWERS: LAX-SCREENING OR CREAM-SKIMMING?
Marco Di Maggio, and Vincent Yao
2020
Personal credit is the fastest-growing segments of the consumer credit market, mainly driven by fintech lenders' staggering expansion. We show that fintech lenders acquire market share by first lending to higher-risk borrowers and then to safer borrowers, and mainly rely on hard information to make credit decisions. Fintech borrowers are significantly more likely to default than neighbor individuals with the same characteristics borrowing from traditional financial institutions. Furthermore, they tend to experience only a short-lived reduction in the cost of credit, because their indebtedness increases more than non-fintech borrowers a few months after loan origination. However, fintech lenders' pricing strategies are likely to take this into account. >more