NEWSLETTER of March 6, 2020

The following content has been added at finexpert:

PwC

WORKING CAPITAL REPORT 2019/20

The handling of working capital and cash flow of companies from the DACH region and the Benelux countries deteriorated again: In 2018, net working capital (NWC) increased by 8.7 percent compared to the previous year, while sales increased by only 4.0 percent on average. In particular, companies are performing less well in terms of receivables and inventories, while a positive trend is emerging in the handling of liabilities. >more

Roland Berger

EUROPEAN PRIVATE EQUITY OUTLOOK 2020

The private equity industry is cautiously optimistic for the 2020 financial year. The reason for this is the stable outlook for M&A transactions with PE participation. The issue of sustainability will have a somewhat stronger impact on the investment behaviour of PE professionals: This factor has the highest significance as a criterion for portfolio value creation. >more

Capital Dynamics

PRIVATE EQUITY CO-INVESTMENT FUNDS – A COMPARISON OF RISKS AND RETURNS

Private equity co-investment funds present a number of attractive performance and risk characteristics. This empirical study explores their outperformance and risk mitigation versus single-manager primary private equity funds. Outperformance is probably attributable to a co-investment fund’s lower overall costs, the manager’s selection skills, and two levels of due diligence on each transaction (the manager and lead sponsor). Downside protection results from enhanced portfolio diversification across geography, sector, industry, vintage year and lead investors/sponsor. >more

PwC

RESPONDING TO THE POTENTIAL BUSINESS IMPACTS OF THE COVID-19 OUTBREAK

The COVID-19 outbreak has been declared a public health emergency of international concern by the World Health Organization, causing huge impact on people's lives, families and communities. As the international response continues to develop, we know that organisations are facing several potentially significant challenges to which they need to respond rapidly. >more

ME TOO: DOES WORKPLACE SEXUAL HARASSMENT HURT FIRM VALUE?

Shiu-Yik Au, Ming Dong, and Andreanne Tremblay
2019
We investigate the impact of workplace sexual harassment on firm value by estimating the incidence of sexual harassment (SH) through textual analysis of employees’ online job reviews. During 2011-2017, the value-weighted portfolio of firms in the top quantiles (top 1% to 5%) of the SH score earned a five-factor annualized alpha ranging from –8.7% to –23.6%, or an annual shareholder value loss of $1.0-$2.4 billion per harassment-prone firm. High sexual harassment scores are also associated with sharp declines in operating profitability and increases in labor costs. These results indicate that sexual harassment has a strong damaging impact on firm value. >more

RISKS AND RETURNS IN CROWDLENDING

Saman Adhami, Gianfranco Gianfrate, and Sofia Johan
2019
Crowdlending has emerged in recent years as an innovative way to finance new ventures and small companies. However, digitalized funding is a new technology itself; therefore, it is prone to mispricing and inefficiencies. We investigate whether peer-to-peer crowdlending to businesses provides investors with returns consistent with the level of risk borne. By studying over 3000 loans mediated on 68 European platforms we show that the returns are inversely related to loans’ riskiness, suggesting that, on average, crowdfunded loans are mispriced. Our results have important implications for the debate about the role of regulation in FinTech. >more