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NEWSLETTER of November 12, 2021


The following content has been added at finexpert:


Studies > Performance

EY
MIXED COMPENSATION BAROMETER
After two years of decline, the salaries of board members of German listed companies rose again for the first time in 2020 - by 2.6 percent for board members and by as much as 7.1 percent for CEOs. On average across all Prime Standard indices, a board member earned 2.05 million euros. For CEOs, the average of total annual direct compensation was 2.86 million euros. In 2019, the compensation of all members of the Executive Board had still decreased by 4.6 percent year-on-year to 1.95 million euros. This is shown by the Mixed Compensation Barometer of the audit and consulting firm EY. Only board members who served on the board for the entire fiscal year were taken into account. The decisive factor was the composition of the indices valid at the end of the financial year. >more

Studies > Corporate Finance

PwC
GSA/DACH RETAIL SECTOR WORKING CAPITAL REPORT 2021
Closed stores and booming online trade, delivery bottlenecks and consumers' demand for more sustainability: the Corona pandemic has had a major impact on retail - and also left its mark on retailers' working capital management (WCM). For example, the capital commitment period of retail companies in Germany, Austria and Switzerland increased by three days in 2020 compared to 2016 and stood at 25 days. This reveals striking differences between the individual sectors: While digital retail has a negative capital lockup period of minus six days, net working capital in the apparel sector is significantly higher at 155 days. >more

Studies > M & A

Mergermarket | Dechert
2022 GLOBAL PRIVATE EQUITY OUTLOOK
In today’s scorching hot private equity market, creativity is king. With unprecedented levels of dry powder, record deal activity, and intense competition, dealmakers need to innovate to stay ahead of the curve. The 2022 Global Private Equity Outlook, an annual report co-published by Dechert LLP and Mergermarket, discusses how PE’s hot streak will fare going into 2022, what headwinds managers may need to navigate, and what strategies they can employ to succeed in the sector’s most active period ever. >more

Studies > Alternative Investments

BlackRock
ON THE HISTORICAL OUTPERFORMANCE OF PRIVATE EQUITY
This study measures the outperformance or alpha of private equity funds relative to public market indices and finds material outperformance across the board. All results shown here are objective market data, and no assumptions or amendments were made to the data. >more


Research Papers > Corporate Governance

GENDER BOARD DIVERSITY AND THE COST OF BANK LOANS
Panagiotis Karavitis, Sotirios Kokas, and Serafeim Tsoukas
2021
We examine the relationship between female board representation and the cost of lending, using a dataset that contains 13,714 loans originated by 386 banks matched with 2,432 non-financial firms over the period 1999 to 2013. We find that firms with female directors command lower loan spreads. In addition, female independent directors have a stronger impact on lowering spreads compared to female directors' other attributes. However, as firms build relationships with their lenders this effect becomes less potent. Finally, when we introduce firm-level heterogeneity we document that changes in gender diversity exert a stronger impact on the cost of lending in the case of financially constrained firms, especially for relationship borrowers. >more

Research Papers > Corporate Finance

CREDIT RISK AND THE LIFE CYCLE OF CALLABLE BONDS: IMPLICATIONS FOR REAL CORPORATE DECISIONS
Bo Becker, Murillo Campello, Viktor Thell, and Dong Yan
2021
We show that callable bonds have both higher yields and lower market prices than non-callable bonds of the same issuer, reflecting the value of call features to issuers and investors. This "cost of callability" and both the inclusion and the exercise of call rights are determined by levels and changes in issuer-specific credit quality. Our agency-based theoretical and empirical analyses further demonstrate that callability reduces debt overhang in corporate mergers and investment. Our results help explain the value and prevalence of callable bonds. They suggest that debt callability is a key capital structure parameter. >more

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