NEWSLETTER of May 14, 2021

The following content has been added at finexpert:

BlackRock
INVEST WITH IMPACT: THE CASE FOR IMPACT INVESTING IN PUBLIC EQUITIES
The paper makes a case for impact investing in public equities through reference to additionality through the investor’s contribution, the investee, and the asset class. We believe public equity markets have historically been overlooked in the impact investing space. >more

ZEW
M&A-REPORT APRIL 2021
The M&A Report is compiled jointly by ZEW and Bureau van Dijk. The M&A Report semi-annually informs about current topics and developments in the field of worldwide mergers and acquisitions drawing on the Zephyr database. Zephyr provides detailed information on more than one million M&A, IPO and Private Equity transactions worldwide. >more

PwC
PRIVATE EQUITY TREND REPORT 2021
European private equity market managed the COVID-19 pandemic year of 2020 relatively well. 57 % of respondents completed fewer transactions in 2020 than in 2019, and 58% of PE investors reported that companies in their portfolio had lower returns or even experienced financial distress. >more

Invest Europe
INVESTING IN EUROPE: PRIVATE EQUITY ACTIVITY 2020
The most comprehensive analysis of fundraising, investment and divestment trends with data on more than 1,600 European private equity and venture capital firms, the 2020 statistics cover 89% of the €708bn in capital under management in Europe. >more

LGIM
PRIVATE CREDIT OUTLOOK
2020 was a difficult year, for society, businesses and markets alike. The pandemic presented new and unforeseen challenges, creating periods of extreme uncertainty, and correspondingly high volatility in financial markets. Positive market sentiment notwithstanding, we remain cautious when it comes to private credit investments. >more

IT'S NOT SO BAD: DIRECTOR BANKRUPTCY EXPERIENCE AND CORPORATE RISK-TAKING
Radhakrishnan Gopalan, Todd A. Gormley, and Ankit Kalda
2020
We show that firms take more (but not necessarily excessive) risks when one of their directors experiences a corporate bankruptcy at another firm where they concurrently serve as a director. This increase in risk-taking is concentrated among firms where the director experiences a shorter, less-costly bankruptcy and where the affected director likely exerts greater influence and serves in an advisory role. The findings show that individual directors, not just CEOs, can influence a wide range of corporate outcomes. The findings also suggest that individuals actively learn from their experiences and that directors tend to lower their estimate of distress costs after participating in a bankruptcy firsthand. >more

M&A RUMORS ABOUT UNLISTED FIRMS
Yan Alperovych, Douglas J. Cumming, Veronika Czellar, and Alexander Peter Groh
2020
We examine an international sample of 68,044 completed, or envisaged but abandoned, M&A transactions involving unlisted targets to determine the effect of transaction rumors on deal-closing propensity and transaction value. Our focus on unlisted firms eliminates the problem of the groundless M&A rumors that are sometimes spread in public stock markets for trading purposes. Addressing the impact of rumors is challenging because (i) rumors may be spread on purpose or may emerge accidentally; (ii) they may be caused by the same observable and omitted drivers that also effect deal closing and transaction value; and (iii) transaction values are only observable for completed deals and there is no regulatory requirement to disclose this information. We apply indirect inference methodology to overcome these challenges. Our analyses reveal that (1) M&A rumors are deal breakers; (2) rumored deals have higher transaction values if they do actually manage to close; and (3) the combined economic impact of M&A rumors as deal breakers and as value drivers is strongly negative – M&A rumors destroyed 32% of the aggregated transaction value of our sample. >more