NEWSLETTER of November 8, 2024

The following content has been added at finexpert:

BCG
CORPORATE AND INVESTMENT BANKING REPORT 2024
The solutions that corporate and investment banking (CIB) businesses provide to the global economy are as essential as ever: access to financing for companies of diverse shapes and sizes; entry to a wide range of asset classes for the international investor community; hedging options for various forms of risk; expertise at choosing and executing mergers and acquisitions; and guidance through many other domains of the financial landscape. Nonetheless, the economics of current CIB business models have remained under pressure since the global financial crisis of 2007 to 2009. >more

Houlihan Lokey
FINTECH MARKET UPDATES: Q3 2024
Houlihan Lokey's FinTech Market Update, released quarterly, provides insights into the latest trends, valuation metrics, and transactional activity within the FinTech sector. The report covers a broad range of subsectors, including payments, lending, insurance technology (InsurTech), and asset management technology. It highlights key drivers and challenges in these areas, such as technological advancements, regulatory pressures, and evolving consumer expectations. >more

BCG
SUSTAINABILITY IN PRIVATE EQUITY, 2024
We are pleased to present the 2024 edition of our annual report on sustainability in private equity (PE). Last year we shared our inaugural report, outlining the sustainability performance of the industry and its connection to value creation. This year’s data from the ESG Data Convergence Initiative (EDCI) shows that, relative to their public company peers, privately owned companies’ performance on sustainability topics continues to be mixed—outperforming public entities in some areas, such as job creation, and lagging in others, such as board diversity. >more

Aurum
HEDGE FUND INDUSTRY DEEP DIVE: Q3 2024
Hedge funds generated positive performance during Q3, up 2.4%, but underperformed both bonds and equities. Strategies that typically have a higher beta to equities were the top performers during Q3: long biased was up 5.1% in Q3, and up 12.4% YTD, and equity long/short was up 2.9% in Q3 and up 11.3% YTD. Quant dropped from being the top performing strategy in H1 to the second from bottom YTD, after returning -2.3% for the quarter. Arbitrage remains the bottom performing strategy YTD, returning 4.2% Industry AUM grew over the quarter with positive P&L offsetting net outflows. >more

DOES FLOOR TRADING MATTER?
Jonathan Brogaard, Matthew C. Ringgenberg, and Dominik Rösch
2023
While algorithmic trading now dominates financial markets, some exchanges continue to use human floor traders. On March 23, 2020 the NYSE suspended floor trading because of COVID-19. Using a difference-in-differences analysis around the closure of the floor, we find that floor traders are important contributors to market quality. The suspension of floor trading leads to higher spreads and larger pricing errors for treated stocks, relative to control stocks. To explore the mechanism we exploit two partial floor reopenings which have different characteristics. Our finding suggest that in person human interaction facilitates the transfer of valuable information that algorithms lack. >more

CARBON RETURNS ACROSS THE GLOBE
Shaojun Zhang
2024
The pricing of carbon transition risk is central to the debate on climate-aware investments. This paper documents that emissions grow linearly with firm sales and the data is only available to investors with significant lags. The positive carbon return, or brown-minus-green return differential, documented in previous studies arises from the forward-looking firm performance information contained in emissions rather than risk premium. After accounting for the data release lag, carbon returns turn negative in the U.S. and insignificant globally. Developed markets experience lower carbon returns due to intense climate concern shocks, while countries with stringent climate policies exhibit higher carbon returns. >more