NEWSLETTER of May 16, 2025

The following content has been added at finexpert:

McKinsey & Company
VORSICHTIGE MARKTERHOLUNG AM DEUTSCHEN IMMOBILIENMARKT – ABER UNEINHEITLICHER ALS JE ZUVOR
The commercial real estate market is showing the first signs of recovery. The transaction volume increased by 85% in the fourth quarter of 2024 compared to the previous year. However, there are significant differences: While residential portfolios (€5.2 billion) and industrial properties (€3.5 billion) are in the lead, the volume for office (€2.8 billion) and retail properties (€2.4 billion) is significantly lower. In the area of financing, a further withdrawal of mutual funds from the real estate investment markets is expected, while at the same time there is increased interest in new types of vehicles and assets such as European Long-Term Investment Funds (ELTIFs) and infrastructure. >more

Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
IWH-INSOLVENZTREND: HÖCHSTSTAND BEI FIRMENPLEITEN SEIT 20 JAHREN
According to the IWH Insolvency Trend, the number of insolvencies of partnerships and corporations in Germany was 1,626 in April. This is 11% more than in the previous month, 21% more than in April 2024 and 67% more than in an average April from 2016 to 2019, i.e. before the coronavirus pandemic. The April figures even exceed the figures from the time of the 2008/2009 financial crisis. The last time more insolvent partnerships and corporations were counted in Germany was in July 2005. >more

Deutsche Bank Research
SAVINGS AND INVESTMENTS UNION IN EUROPE
The EU’s envisaged “Savings and Investments Union” is a renewed attempt to strengthen its capital markets and improve the growth outlook. The Draghi report estimates that additional investment of EUR 750 bn p.a. is needed to strengthen the EU’s competitiveness. The lion’s share will have to come from private, not public investment. Europe traditionally has a bank-based financial system, but bank financing has limits – capital markets will have to play a key role in facilitating the flow of funds into productive investments. This slide deck looks at where Europe’s capital markets stand today, benchmarking them against the US. It dives into various segments, notably the capacity of (1) stock markets and corporate bond markets to provide alternative funding opportunities for businesses; (2) risk capital markets to fund young, innovative companies; and (3) the securitisation market to allow banks to free up capital and lend more to the economy. >more

ifo Institut
START-UPS IN DEUTSCHLAND: AKTUELLE ENTWICKLUNG UND WIRTSCHAFTSPOLITISCHER HANDLUNGSBEDARF
Start-ups play a key role in innovation and successful structural change. In Germany, start-ups and venture capital financing have increased noticeably over the last ten years and the number of successful start-ups is growing. Nevertheless, in an international comparison, Germany is at best in the middle of the field. In order to make better use of the potential to create wealth through start-ups, a comprehensive economic policy agenda is needed to improve the framework conditions for start-ups, which includes reforms to universities, the immigration of skilled workers, the capital market and public procurement as well as a reduction in bureaucracy, increased digitalization of public administration and changes at EU level that reduce barriers to innovation and facilitate the scaling of new business models across Europe. >more

WOMEN IN CHARGE: EVIDENCE FROM HOSPITALS
Katharina Lewellen
2025
The paper examines the decision making, compensation, and turnover of female CEOs in U.S. hospitals, where women make up 20% of all CEOs. Contrary to the literature on lower-ranked executives and directors in public firms, there is no evidence that gender differences in preferences for risk or altruism affect decision making of hospital CEOs: corporate policies do not shift when women take (or leave) office, and male and female CEOs respond similarly to a major financial shock by cutting investment, employment, and salary growth. There are, however, significant differences in how hospitals compensate and replace male and female CEOs: women earn lower salaries than men, face flatter pay-for-performance incentives, and exhibit greater turnover due to poor performance. This evidence suggests that boards of directors perceive women in CEO positions as less productive than men. >more

WHO HOLDS SOVEREIGN DEBT AND WHY IT MATTERS
Xiang Fang, Bryan Hardy, and Karen K. Lewis
2024
This paper studies the impact of investor composition on the sovereign debt market. We construct a data set of sovereign debt holdings by foreign and domestic bank, non-bank private, and official investors for 101 countries across three decades. Private non-bank investors absorb disproportionately more debt supply than others. Moreover, non-bank investors’ demand for emerging market debt is most responsive to its price. Counterfactual analysis of emerging market sovereigns shows a 10% increase in debt leads to a 5.8% yield increase, but an out-sized 8.4% increase without non-bank investors. We conclude that sovereigns are vulnerable to the loss of non-bank investors. >more