NEWSLETTER of May 2, 2025

The following content has been added at finexpert:

BCG
GLOBAL ASSET MANAGEMENT REPORT 2025
The global asset management industry reached a record $128 trillion in assets under management (AuM) in 2024, up 12% from the previous year. The gains marked a strong continuing rebound from the decline that occurred in 2022. Nevertheless, that growth can’t mask the deeper structural challenges that the industry faces, including margin pressures, shifting investor preferences, and intensifying competition. >more

Aurum
HEDGE FUND INDUSTRY PERFORMANCE DEEP DIVE – Q1 2025
Hedge funds generated positive performance during Q1 2025, up 0.7%, outperforming equities, but underperforming bonds. On an asset-weighted basis, quant is the top strategy for Q1, returning 2.4%, however equally weighted performance was much lower at 0.1%. There was broad dispersion in quant sub-strategy returns. Equity l/s is the only strategy with negative returns, returning -1.7%. The best performing strategies in 2024 (multi-strategy and equity l/s) were the weakest performing in Q1 2025. Similarly, the weakest performing strategies in 2024 (arbitrage, quant and macro) were the strongest performing strategies in Q1 2025. Industry AUM grew over the quarter with positive P&L offsetting net outflows. >more

KPMG
AI IN FINANCIAL REPORTING AND AUDIT: NAVIGATING THE NEW ERA
AI is transforming financial reporting and auditing and is set to dramatically grow with varying levels of speed around the world and across industries – helping businesses create smarter and more joined-up information flows with better identification and response to risk and a much greater ability to detect anomalies and outliers. KPMG’s ‘AI in financial reporting and audit: Navigating the new era’ study of senior executives and business leaders across 1800 companies globally confirms the importance of AI in financial reporting and auditing and clarifies, it is not hype. AI is changing auditing and businesses expect auditors to lead the way. >more

Goldman Sachs
TARIFF-INDUCED RECESSION RISK
The Trump Administration’s dramatic tariff moves have upended decades of US trade policy, sparking a rapid reassessment of the US and global economic outlook and a surge in tariff-induced recession fears. What lies ahead for the US economy amid this radical policy shift — and especially the uncertainty around it — is Top of Mind. >more

ARE CEOS REWARDED FOR LUCK? EVIDENCE FROM CORPORATE TAX WINDFALLS
Martina Andreani, Atif Ellahie, and Lakshmanan Shivakumar
2025
Focusing on the one-off tax gains and losses (i.e., windfalls) associated with the 2017 Tax Cuts and Jobs Act, we re-examine whether CEOs are rewarded for luck. We find that weakly-monitored CEOs are compensated for the windfall tax gains but not penalized for the corresponding tax losses. No such pattern is observed for CEOs facing greater pay scrutiny. The pay for windfalls cannot be explained as rewards for CEOs’ efforts, talents, political activities, or as firms sharing their tax gains with all executives. The results are more consistent with rent extraction by CEOs facing weak pay scrutiny. >more

THE EFFECTS OF GOING PUBLIC ON FIRM PROFITABILITY AND STRATEGY
Borja Larrain, Gordon M. Phillips, Giorgo Sertsios, and Francisco Urzúa I.
2025
We study the effects of going public using a unique panel of firms in 16 European countries for which we observe financial data before and after initial-public-offering (IPO) attempts. We compare completed and withdrawn IPO attempts. We instrument for the decision to complete the IPO using prior market returns. After instrumenting, we find a positive effect of going public on profitability, contrary to previous results. We also find a post-IPO expansion in sales per employee, subsidiaries, and countries in which firms operate. Overall, our results are consistent with going public inducing a shift in strategy towards increased commercialization. >more