NEWSLETTER of March 19, 2021

The following content has been added at finexpert:

Mergermarket
CREATIVE DEAL STRUCTURES: ENERGIZING THE M&A MARKET POST-CRISIS
Mergermarket is pleased to present Creative Deal Structures: Energizing the M&A Market Post-Crisis, published in association with Sidley Austin LLP. Creative structures have become increasingly important in bridging the gap between sellers’ expectations and buyers’ willingness to pay. Based on interviews with 150 respondents from US corporates and private equity firms, this report analyzes the ways in which M&A is moving forward in spite of the pandemic. >more

Allen & Overy
GLOBAL TRENDS IN MERGER CONTROL ENFORCEMENT
This report highlights key trends and developments in 2020 global merger control activity, and looks ahead at what to expect in 2021. Despite the impact of the Covid-19 pandemic on global M&A activity in 2020, we saw no let-up in antitrust authorities’ tough approach to merger control enforcement. Considering reforms to merger control rules remained a priority, particularly in the digital sector. As we progress through 2021, we expect to see many of the merger control proposals on the table translate into practice. Going forward, merging parties should prepare for greater scrutiny of M&A, including in relation to foreign investment control reviews, combined with increasingly sophisticated merger control assessments. >more

EY
VENTURE CAPITAL AND STARTUPS IN GERMANY 2020
The funding of the current top 100 German tech startups has further improved in 2020 compared to previous years: They have been able to raise 13.7 billion US dollars from investors since their founding. Compared to the top 100 startups in 2019, this represents an increase of USD 3.7 billion or 37 percent. The ten best-funded technology startups in 2020 received a combined total of 1.3 billion U.S. dollars less than the top ten of the previous year, bringing their venture capital total to 1.8 billion U.S. dollars. On the other hand, the investments were distributed among more startups: The number of deals in the technology segment rose from 791 in 2019 to 820 last year. >more

Deloitte
GLOBAL RISK MANAGEMENT SURVEY: 12TH EDITION
The difficulties caused by COVID-19 and the economic uncertainty pose new challenges for financial service providers. The 12th edition of the Global Risk Management Survey evaluates the current state of risk management based on the assessment of 57 financial service providers from different sectors (banks, insurance companies and investment companies) of the global financial industry. When asked about the most important trends in risk management for the next two years, financial services respondents cited global financial crises (48%) and global pandemics (42%), among others, signaling a focus on economic uncertainty and the dislocations caused by COVID-19. >more

SHORT SELLING EQUITY EXCHANGE TRADED FUNDS AND ITS EFFECT ON STOCK MARKET LIQUIDITY
Egle Karmaziene, and Valeri Sokolovski
2020
We examine short selling of equity exchange traded funds (ETFs) using the 2008 short-sale ban. Contrasting the previously documented contractions in bearish strategies during the ban, we find a significant increase in short sales of the largest, most liquid ETF, the S&P 500 Spider. We offer evidence suggesting this upsurge was driven primarily by investors circumventing the ban. We show that the ban’s detrimental effect on stock liquidity was around 30% less severe for the Spider’s constituents. Our results suggest that ETF shorts can substitute for short sales of individual stocks, thereby alleviating short-sale constraints’ adverse effect on liquidity. >more

STRESS TESTS, ENTREPRENEURSHIP, AND INNOVATION
Sebastian Doerr
2021
This paper shows that post-crisis stress tests have negative effects on entrepreneurship and innovation at young firms. Exploiting unique data on business-related home equity loans in HMDA, I show that stress tested banks strongly cut small business loans secured by home equity, an important source of financing for entrepreneurs. Lower credit supply leads to a relative decline in entrepreneurship in counties with higher exposure to stress tested banks. The decline is stronger in sectors with a higher share of young firms using home equity financing, i.e., in which the reduction in credit hits hardest. More-exposed counties also see a decline in young firms’ patent applications as well as labor productivity, reflecting young firms’ disproportionate contribution to growth. >more