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NEWSLETTER of July 15, 2022


The following content has been added at finexpert:


Studies > Corporate Finance

PwC
EMISSIONSMARKT DEUTSCHLAND: Q2 2022
Inflation and energy prices are climbing to record levels, global supply chains are sputtering, and the downward slide on the stock markets continues in the wake of the increasingly noticeable turnaround in interest rates by many central banks: In this environment, hardly any companies dare to go public. In the second quarter of 2022, the Frankfurt Stock Exchange registered only two initial public offerings (IPOs), which together raised 121 million euros. Investors are also very cautious about capital increases in view of the difficult market environment. >more

Studies > Corporate Finance

EY
GLOBAL IPO TRENDS Q2 2022
In view of escalating geopolitical tensions, rising interest rates and high volatility on the world's stock markets, the recovery on the global IPO market remains a long time coming: Despite the difficult capital market environment, a total of 305 companies ventured onto the trading floor worldwide in the second quarter - 54 percent fewer than in the second quarter of the record year 2021. The issue volume actually fell by 65 percent to 40.6 billion US dollars. The stock exchanges in the USA and Europe were similarly affected: Compared with the second quarter of the previous year, the number of IPOs in the United States fell from 119 to 30, while issue volume shrank by as much as 95 percent from 43 to just over two billion US dollars. In Europe, the number of IPOs fell from 166 to 43, and the issue volume shrank from 23 to 1.5 billion US dollars. >more

Studies > Macro

Oliver Wyman
ENERGIESOUVERÄNITÄT: DER PREIS DER UNABHÄNGIGKEIT
The reduction of German gas imports from Russia has far-reaching consequences and is associated with cuts in consumption for many people in Germany: If gas imports were to stop in the short term, energy prices could rise by up to 130 percent. But the consequences are also enormous for energy-intensive industries, small and medium-sized enterprises and energy suppliers. >more

Studies > Macro

Handelsblatt Research Institute | Roland Berger | Latham Watkins
KOMPASS FÜR DEUTSCHLAND: HANDLUNGSDRUCK IN UNGEWISSEN ZEITEN
Rarely have there been so many crises at the same time, and never have the challenges of our globalized world been more evident: Corona pandemic, supply chain problems, Ukraine war, energy and raw material shortages, and massive inflation - all these disruptive events have unforeseeable economic consequences worldwide. All major industrialized nations are equally affected: While the U.S. is struggling with massive inflation and the European Union (EU) is additionally being tested by the Ukraine war, China's economy is slipping further and further due to ongoing lockdowns under the zero-covid strategy. As a result, GDP (gross domestic product) forecasts for Europe, China and the U.S.A. are falling almost in lockstep and a "triple recession" is looming. >more


Research Papers > Alternative Investments

THE IMPACT OF LEADERSHIP DIVERSITY ON PRIVATE EQUITY FUND PERFORMANCE
Yilmaz Bekyol, and Bernhard Schwetzler
2022
This study considers the trade-off between better top management team (TMT) decision-making involving complementary perspectives and inefficiencies due to conflicts between individuals. In analyzing characteristics of 1,071 fund partners involved in 1,295 buyout deals by 117 funds, we find that TMTs with greater variety in socio-demographic aspects achieve higher money multiples or IRR. In contrast, greater occupational diversity is associated with a negative net effect on performance. This suggests that the endowment of diversity rooted in demographic characteristics is generally beneficial, while voluntarily acquired attributes are associated with higher coordination efforts. Additionally, we find the allocation of team members and the associated diversity levels on individual deals of a fund affect fund performance. Generally, an even allocation is positively (negatively) related to fund performance for occupational (socio-demographic) diversity. However, for funds with a high enough endowment of diversity, even distribution across deals is also positively associated with fund performance for socio-demographic diversity. Finally, we find a positive moderating impact of CEO involvement and a negative moderating impact of industry specialization. Overall, the results of this study could guide LPs and fund-of-funds in investment processes and support GPs with staffing decisions. >more

Research Papers > Alternative Investments

THE CROSS-BORDER BUYOUT NEXT DOOR
Benjamin Hammer, Sven Mettner, Denis Schweizer, and Timothy E. Trombley
2022
Using a hand-collected sample of global office locations of private equity (PE) firms, we show that portfolio companies backed by local offices outperform cross-border buyouts in terms of operational improvements. The effect strengthens with higher cross-country cultural distance or information frictions, and with the host country’s economic policy uncertainty. Experiential learning helps cross-border buyouts catch up in the long run, whereas hiring a local professional does not serve to close the performance gap with local offices. Furthermore, local offices can even provide a competitive edge over domestic peers. However, the extent to which this is true depends on society’s level of distrust in foreigners. Our main conclusions hold for measures of buyout pricing and deal returns and are robust to several endogeneity checks. Semi-structured interviews with PE professionals support our findings and shed light on antecedents of office openings and channels for portfolio companies’ outperformance. >more

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