NEWSLETTER of March 26, 2021

The following content has been added at finexpert:

Russell Reynolds
GENDER GAP: WOMEN INVESTMENT PROFESSIONALS IN GERMAN-SPEAKING EUROPE
Diversity is more than just a social issue; it is also increasingly a business issue. A growing body of research documents the positive effects of diversity on talent strategy, innovation and financial performance. In German-speaking Europe women are underrepresented in multiple industries. One of the most extreme instances of this gender gap occurs in private equity. To learn more, Russell Reynolds Associates (RRA) analyzed the profiles of more than 1350 private equity professionals at over 100 funds and found that only 8 percent of the German-speaking investment professionals are women. This compares to 13 percent representation among private equity professionals globally, according to recent Preqin data. >more
 

Skadden | Activistmonitor
ACTIVIST INVESTING IN EUROPE 2021
Skadden has partnered with Activistmonitor on research covering the latest trends in activist investing, including interviews with 50 senior executives of European public companies and with activist investors. Corporates should be prepared for overall campaign volumes to return to their pre-pandemic levels and will need to be mindful of becoming targeted by North American activists. >more

Mergermarket
GLOBAL DEALMAKERS: CROSS-BORDER M&A IN 2021
Global M&A was shaken in 2020, however, the impact of Covid-19 may not have been as bad as expected. Deal activity for Q3 and Q4 were among the highest on record as dealmakers spent their way through the crisis. This unprecedented drive helped propel average deal value above that of 2019, averting a lull and more prolonged recovery similar to that in the post-GFC period. As confidence continues to grow, the question arises: Is it onward and upward in 2021? >more

BVK
DER DEUTSCHE BETEILIGUNGSMARKT 2020
2020 was no ordinary year and also posed numerous challenges for the German private equity market. Despite this, private equity companies in Germany invested a total of €12.6 billion. This not only underlined the strength of the German private equity market, but also helped many companies through the pandemic and is now supporting them in overcoming the further consequences of the pandemic. >more

Deutsche Bank Research
OUTLOOK FOR THE GERMAN RESIDENTIAL PROPERTY MARKET 2021 AND BEYOND: HOUSE PRICE CYCLE COULD END IN 2024
Our analysis suggests that the nationwide price cycle will come to an end this decade. Despite all the uncertainty, we believe the cycle is likely to end in 2024. The fundamental supply shortage should ease off in the coming years. The lower level of immigration during the pandemic is also a contributing factor. If the cycle does in fact end in 2024, we expect nominal house prices to decline for a short period of time based on comparable historical data. >more

REMOTELY PRODUCTIVE: THE ECONOMICS OF LONG-DISTANCE CEOS
Ran Duchin, and Denis Sosyura
2021
We provide the first evidence on the efficacy of long-distance working arrangements between CEOs and firms. Long-distance CEOs underperform according to operating performance, insider reviews, and announcement returns to CEO departures. These effects are stronger when the CEO’s commute is longer and crosses multiple time zones. Using the quality of schools available to the CEO’s children as an instrument for the decision to commute, we argue that these effects are causal. CEOs’ private costs of working remotely have long-run effects on their strategic decisions and on the future of their firms. Remote CEOs are 60% more likely to sell their firm to an acquirer, and they do so at bargain prices. >more

EFFICIENCY OR RESILIENCY? CORPORATE CHOICE BETWEEN FINANCIAL AND OPERATIONAL HEDGING
Viral V. Acharya, Heitor Almeida, Yakov Amihud, and Ping Liu
2021
We study the corporate choice between financial efficiency and operational resiliency. Firms substitute between saving cash for financial hedging, which mitigates the risk of financial default, and spending on operational hedging, which mitigates the risk of operational default such as a failure to deliver on obligations to customers. This tradeoff is particularly strong for financially constrained firms and results in a positive relationship between operational spread (markup) and financial leverage or credit risk. We present empirical evidence supporting this tradeoff, the effect being pronounced for constrained firms. >more