NEWSLETTER of November 20, 2020

The following content has been added at finexpert:

PwC
FINTECH KOOPERATIONSRADAR
German fintechs have been able to maintain their standing in the market during the corona crisis and VC-financed start-ups in particular are increasingly becoming established partners in the financial sector. As the "Fintech Cooperation Radar" of the auditing and consulting firm PwC Germany shows, significantly fewer Fintechs had to cease operations in 2020 and were also less frequently taken over by other companies. >more

EY
MIXED COMPENSATION BAROMETER 2020
For the second year in a row, the salaries of board members of German listed companies have fallen. In 2019, their average total direct remuneration decreased by 4.6 percent. On average, they earned 1.99 million euros. While female board members were still able to buck the downward trend in 2018, their remuneration also fell in 2019 - by 5.9 percent, even more than that of men (minus three percent). >more

RBC Global Asset Management
THE GLOBAL INVESTMENT OUTLOOK: FALL 2020
Equity markets have staged a remarkable recovery as central banks provided critical backstops, economies gradually emerged from shutdown and investor confidence was restored. The economy rebounded quickly after mass quarantines, but progress has slowed as the easiest gains have already occurred. >more

Roland Berger
COVID-19 HAT DIE WIRTSCHAFT HART GETROFFEN – RESTRUKTURIERUNGSBEDARF EXPLODIERT
Roland Berger asked 500 restructuring experts from Germany, Austria and Switzerland to provide a forecast for the coming year and condensed the results in the "2020 Restructuring Study". Conclusion: Hardly any experts still expect a v-shaped recovery of the economy. On the contrary: An overwhelming majority of 86 percent of those surveyed expect a significant increase in the need for restructuring in the coming year. >more

DETERMINANTS OF HEDGE FUND INVESTMENT IN CORPORATE ENDGAMES
Ludwig Dobmeier, Renata Lavrova, and Bernhard Schwetzler
2020
Under German law the corporate endgame process of obtaining full control over a company offers multiple investment opportunities for investors with high investment flexibility, and is therefore particularly attractive to hedge funds. This paper investigates the determinants of hedge fund investment in corporate endgame processes based on a sample of 76 endgame situations of publicly listed German companies and investment data of 326 hedge funds. Examining characteristics of investment targets, we find that hedge funds invest in companies with a non-dominant majority owner and high stake of index funds as latter’s inability to react in change of control situations creates a supportive investment environment for hedge funds. Hedge funds are most likely to invest after takeover consummation and before announcement of a new endgame transaction. Investigating the determinants of ongoing engagement after initial investment, we find that the presence of other institutional investors, especially hedge funds positively affects engagement likelihood, serving as a validation of the own investment approach. Abnormal performance and trading liquidity of target stock also positively affect hedge funds’ engagement. The results indicate that the endgame process in Germany is an attractive investment opportunity for hedge funds, while hedge fund involvement also adds complexity to the corporate control process. >more

CORPORATE GOVERNANCE CODES AS A MEAN OF ENSURING STANDARDIZED CORPORATE GOVERNANCE REPORTING: THE EXAMPLE OF THE GERMAN CORPORATE GOVERNANCE CODE
Marc Steffen Rapp, and Marco O. Sperling
2020
Around the world, regulators and private initiatives have released corporate governance codes, which in most cases represent a collection of best practice rules adopted to local regulations. Taking the example of the German Corporate Governance Code (GCGC), this paper discusses governance codes as a mean of (semi)standardized governance reporting. We document systematic cross-sectional heterogeneity in compliance behavior with the GCGC and discuss implications for capital market valuation. >more