NEWSLETTER of March 22, 2024

The following content has been added at finexpert:

Morgan Stanley
SUSTAINABLE REALITY
Sustainable funds outperformed their traditional peers across all major asset classes and regions in 2023, according to a new “Sustainable Reality” report(opens in a new tab)1 from the Morgan Stanley Institute for Sustainable Investing. Overall, sustainable funds generated median returns of 12.6%, almost 50% ahead of the 8.6% returns of traditional funds, with outperformance coming mostly in the first half of the year. Investor demand also remained strong with assets under management up 15% from 2022 levels, reaching $3.4 trillion; sustainable funds now account for 7.2% of total global AUM. >more

KfW Research
ANTEIL DER CHEFINNEN 2023 RÜCKLÄUFIG. FRAUEN BEI FÜHRUNGSPOSITIONEN IM MITTELSTAND GENERELL UNTERREPRÄSENTIERT
The proportion of women at the helm of SMEs has recently fallen significantly again to 15.8%. In 2023, 602,000 small and medium-sized enterprises were headed by a woman, a drop of around 155,000 companies. The reluctance of women to start a business is still one reason for the low proportion of female bosses. The latest special analysis of the KfW SME Panel also shows the proportion of female managers in all management positions in SMEs for the first time. According to this, around a quarter of all management positions will be held by women in 2023 (26%). Measured against the proportion of women in the workforce as a whole (47%), women are therefore underrepresented in management positions in SMEs. Female-led companies have almost 5 times more female managers than male-led SMEs. More female founders are needed to increase the proportion of women at the top of SMEs. >more

Institut der Deutschen Wirtschaft
LEASING-MARKTBERICHT 2024
Investment in Germany is suffering from the current macroeconomic conditions. In 2023, real gross fixed capital formation fell again by 0.7% compared to the previous year. This means that it has been more or less consistently 2.5% below the 2019 level for three years now. Real investment in equipment increased by 3% in 2023 compared to the previous year. However, the recovery trend did not continue in the fourth quarter of 2023 and, adjusted for price, seasonal and working-day effects, it was recently slightly below the level of the fourth quarter of 2019. Construction investment has been declining over the past three years due to the sharp rise in financing costs. >more

Allianz Research
TRUMPONOMICS: THE SEQUEL
In this report, we look at what the return of President Trump could mean for growth, inflation and capital markets, as well as trade, fiscal and industrial policies. So far, several of Trump’s campaign pledges have raised far-reaching questions especially for the transatlantic partnership: from the resolution of the war in Ukraine, to the US exiting (again) the Paris Accord, to an escalation of the US-China Cold War. Narrowing down on economic policy-making, we analyzed three fault lines: (i)  the return of trade war, with the alleged plan to increase tariff rates to 10% and unleash industrial subsidies to re-shore production in the US; (ii) the fiscal bazooka that could ensue after the elections, given the 2017-2019 playbook, and the return of dirigisme everywhere – in contrast with Biden’s promised fiscal cliff – and (iii) the conduct of a credible monetary policy. >more

HOW DOES EQUITY ALLOCATION IN UNIVERSITY SPINOUTS AFFECT FUNDRAISING SUCCESS? EVIDENCE FROM THE UK
Thomas F. Hellmann, Junida Mulla, and Matthias Qian
2023
There is considerable controversy about the allocation of equity in university spinouts. Founder teams and outside investors frequently criticize universities for taking excessive ownership stakes, weakening entrepreneurial incentives, and making spinouts ‘uninvestable.’ Universities in turn defend their ownership rights in terms of the resources needed to generate the research in the first place. This paper uses detailed data from UK spinouts to assess the impact of university ownership on subsequent fundraising success. Perhaps surprisingly, the data suggests a positive correlation between university stakes and fundraising success, even after controlling for observable characteristics. However, this correlation appears to be partly driven by universities retaining larger stakes in their most promising spinouts. Using an instrumental variable based on the precedence set by prior spinouts within a university, we find some evidence that higher university stakes reduce the likelihood of fundraising success. A 10% larger university stake decreases the probability of raising venture capital on average by 3%. The negative effect is concentrated in less science-intensive spinouts (e.g., IT), and is statistically insignificant in the more science-intensive spinouts (e.g., engineering, or biomedical). Reductions in university stakes are also associated with increases in the spinout rate. >more

SEXISM, CULTURE, AND FIRM VALUE: EVIDENCE FROM THE HARVEY WEINSTEIN SCANDAL AND THE #METOO MOVEMENT
Karl V. Lins, Lukas Roth, Henri Servaes, and Ane Tamayo
2023
During the revelation of the Harvey Weinstein scandal and the re-emergence of the #MeToo movement, firms with a non-sexist corporate culture, proxied by having women among the five highest paid executives, earn excess returns of 1.6% relative to firms without female top executives. Returns for firms with female top executives are substantially higher in industries with few women in executive positions and in states with greater sexism or a larger gender pay gap. These returns are driven by changes in investor preferences towards firms with a non-sexist culture. Institutional ownership increases in firms with a non-sexist culture after the Weinstein/#MeToo events, particularly for institutions with larger holdings and investors with a lower ESG focus ex-ante. Firms without female top executives improve gender diversity after these events, even in sexist states and in industries with few women executives. Our evidence attests to the value of having a non-sexist corporate culture. >more