NEWSLETTER of June 30, 2023

The following content has been added at finexpert:

Deutsche Bank Research
LEICHTE REZESSION UND BREMSSPUREN IM KREDITGESCHÄFT IN Q1 2023
Lending to companies and self-employed persons continued to normalize, i.e. calm down, in the first quarter due to low demand and tighter credit standards (volume EUR +9.1 billion; +6.4% yoy). This mainly affected short-term loans and almost all sectors. Foreign banks and development banks are well ahead of the competition. The increase in interest rates and deposits weakened. >more

Neuberger Berman
GP-LED SECONDARIES: PRIVATE EQUITY’S MOST UNDERSERVED MARKET?
Over the last 12 to 18 months, we have witnessed a meaningful decline in private equity (PE) exits, which triggered an estimated $106 billion of net cash outflows for PE investors in 2022 alone. In our view, this dynamic — combined with the denominator effect and generally elongating holding periods — is opening attractive opportunities for providers of liquidity to the private markets. We believe GP-orchestrated “continuation funds” can help ameliorate this liquidity challenge and also offer a compelling way for investors to gain exposure to private markets at a potentially attractive point in the cycle and in a targeted, highly selective manner. >more

KfW Research
VENTURE CAPITAL-MARKT IN DEUTSCHLAND DASHBOARD Q1 2023
In the first quarter of 2023, a total of EUR 1.9 billion was invested in 254 financing rounds on the German VC market. In the short term, the market is thus unimpressed by the bankruptcy of the US Silicon Valley Bank. However, a turnaround remains to be seen due to persistently unfavorable conditions (inflation, tightening of monetary policy, poor prospects for IPOs). >more

Institut der deutschen Wirtschaft (IW)
DEINDUSTRIALISIERUNG. EINE ANALYSE AUF BASIS VON DIREKTINVESTITIONEN
Never before have companies withdrawn so much money from Germany as they did last year, a new study by the Institute of the German Economy (IW) shows. The figures are alarming: Around $132 billion (125 billion euros) more direct investment flowed out of Germany in 2022 than was invested in the Federal Republic in the same period. In the worst case, this is the beginning of deindustrialization. >more

(WHY) DO CENTRAL BANKS CARE ABOUT THEIR PROFITS?
Igor Goncharov, Vasso Ioannidou, and Martin C. Schmalz
2023
We document that central banks are discontinuously more likely to report slightly positive profits than slightly negative profits, especially amid greater political pressure, the public’s receptiveness to more extreme political views, and when governors are reappointable. The propensity to report small profits over small losses is correlated with higher inflation and lower interest rates. We conclude that there are agency problems at central banks, which give rise to discontinuous profit incentives and are related to their policy choices and outcomes. These findings inform a debate about the political economy of central banking and central bank design. >more
 

MANDATORY FINANCIAL DISCLOSURE AND M&A ACTIVITY
Marcelo Ortiz M., Caspar David Peter, Francisco Urzúa I., and Paolo F. Volpin
2023
Taking advantage of the implementation of the 2003 European Commission (EC) directive on financial reporting, we explore the impact of mandatory financial disclosure on mergers and acquisitions (M&A). We find robust evidence that the number (and volume) of private firms becoming an M&A target increases with mandatory disclosure. The analyses of cross-industry differences, deal-level data, and post-deal performance indicate that financial disclosure increases M&A activity by reducing information frictions in the market for corporate control. >more