NEWSLETTER of June 12, 2026

The following content has been added at finexpert:

Bank for International Settlements
GLOBAL PENSION ASSET ALLOCATIONS AND DEBT MARKETS
The pensions sector is an important investor group in global financial markets and a key holder of government and corporate debt. This paper examines the evolution of pension fund asset allocations around the globe and documents important structural changes. Over time, pension investors have shifted from fixed income securities to mutual fund shares. In the meantime, they have also reallocated from traditional investments into alternative investments. Evidence from US pensions suggests that the decline in the fixed income share is due to both private and public debt. We hypothesise that a global decline in interest rates is one potential driver of this change. Using a global sample, we document that declining local currency government bond yields are associated with lower bond shares in pension portfolios and higher shares of mutual fund and foreign assets. We discuss the potential implications of these trends for borrowing costs. >more

FTI Consulting
2026 PRIVATE EQUITY AI RADAR
AI deployment is beginning to create real separation within private equity. Across the 200 fund and operating leaders surveyed, most report positive financial impact from AI initiatives across their portfolio companies (“PortCos”). These gains span revenue acceleration, cost optimization, underwriting insights and more structured exit preparation. While adoption remains uneven and overall penetration is still relatively low, the emerging performance gaps between higher and lower performing funds are becoming increasingly clear. >more

ZEW
EUROBONDS FÜR EUROPA? – EUROPÄISCHE SCHULDEN: INSTRUMENTE, IHRE NUTZUNG UND IHRE PERSPEKTIVE
In the ongoing negotiations on the EU’s forthcoming Multiannual Financial Framework (MFF), proposals to introduce ‘Eurobonds’ are attracting a great deal of attention. However, this overlooks the fact that the EU already has a wide range of debt instruments at its disposal, as a study by the ZEW in Mannheim shows. At the end of 2024, European Union debt stood at just over 800 billion euros. By the end of 2030, this figure is expected to rise to more than 1.15 trillion euros based on existing agreements. >more

Lazard
POLITICAL CAPITAL: HOW GEOPOLITICS IS RESHAPING CROSS-BORDER INVESTMENT AND M&A
Geopolitical competition is reshaping the global landscape for cross‑border investment and mergers and acquisitions (M&A), influencing how capital is deployed along key regional corridors. As major powers deploy a broader and more discretionary set of economic statecraft tools like tariffs, export controls, investment screening, sanctions, and data‑governance regimes, corporates now operate in an environment where economic and national security priorities increasingly determine where capital can move, how deals are structured, and which sectors remain accessible. >more

THEMATIC CONCENTRATION AND MUTUAL FUND PERFORMANCE
John (Jianqiu) Bai, Yuehua Tang, Chi Wan, and H. Zafer Yuksel
2026
This study examines whether mutual fund managers generate alpha through thematic investment strategies that select stocks poised to benefit from specific themes. Using textual analysis of 10-K filings, we identify stocks’ thematic exposures and construct each fund’s thematic concentration index (TCI) from its holdings. High-TCI funds significantly outperform, with a top-minus-bottom decile spread of 4.26% in annualized four-factor alpha. Managers’ thematic expertise is related to their undergraduate field of study. Outperformance arises from superior stock selection rather than theme-related timing, with an informational advantage on firm earnings, particularly in stocks exposed to themes related to managers’ undergraduate training. >more

MARIJUANA LEGALIZATION AND FIRMS' COST OF EQUITY
Scott Guernsey, Matthew Serfling, and Cheng Yan
2024
After medical marijuana legalization (MML) by U.S. states, firms’ cost of equity (COE) decreases, especially for those with more growth opportunities, higher productivity, or a more skilled workforce. This policy change also reduces firm risk and leads to an increase in labor supply through increased labor force participation, employment, hours worked, and net migration. Further, home prices rise after MML, reflecting increased local housing demand due to a growing supply of workers. These findings align with theoretical models that link asset prices to labor markets and suggest that MML can lower firms COE by mitigating labor search frictions. >more