NEWSLETTER of October 29, 2021

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to October 15, 2021 >more

BlackRock
2021 GLOBAL OUTLOOK: Q4 UPDATE
The path for further gains in risk assets looks to have narrowed after a long run higher, but we reaffirm our tactical pro-risk stance – supported by a broadening global restart and ongoing negative real interest rates – even as the path for further gains in risk assets looks to have narrowed after a long run higher. >more

BCG
THE 2021 M&A REPORT: MASTERING THE ART OF BREAKING UP
With M&A activity approaching record levels, companies are turning to divestitures to achieve a variety of corporate objectives, such as raising cash or optimizing the corporate portfolio. The 2021 M&A Report (produced in collaboration with Paderborn University) examines the value creation potential of divestitures and how companies can capture the benefits while managing the costs of these often-complex transactions. >more

BlackRock
HOW TO FINANCE THE NET-ZERO TRANSITION IN EMERGING MARKETS
Climate change is a global crisis that requires a global response. Without a successful green transition everywhere, climate risk is unmanageable anywhere. Emerging markets (EMs) are essential to the transition, but they are starved of capital to fund it. A big emerging question: how can EMs get the investment they need for the net-zero transition? >more

McKinsey & Company
ENTREPRENEURSHIP ZEITGEIST 2030: MAKING START-UPS GERMANY’S NEXT ECONOMIC POWERHOUSE
McKinsey study shows under which conditions start-ups can become a growth engine for Germany by 2030 - Total start-up ecosystem can create 1.4 million new jobs and reach a market capitalization of EUR 2,300 billion - Foundations of a total of 41,000 start-ups possible by 2030. >more

GLASS HALF FULL OR HALF EMPTY? ACTIVISTS, SHORT SELLERS, AND DISAGREEMENT
Tao Li, Pedro A. C. Saffi, and Daheng Yang
2021
We study events in which activist hedge funds and short sellers target the same stock, using unique European data on activism and mandatory disclosures of large short positions. We find that the presence of large short sellers positively influences activists' targeting decisions (especially when investor disagreement is high) and their success and profitability. Hedge fund activism is associated with a reduction in short interest but it does not affect the likelihood of a large short position. Our results suggest that corporate managers become more receptive to activists' demands after they face pressure from large short sellers. >more

PRIVATE EQUITY IN THE HOSPITAL INDUSTRY
Janet Gao, Merih Sevilir, and Yong Seok Kim
2021
This paper studies the growing presence of private equity (PE) acquirers in the hospital industry. We examine employment, operational efficiency and patient outcomes at hospitals acquired by PE firms. While the total employment at target hospitals significantly declines, the proportion of physicians and nurses in the total workforce (skilled worker ratio) increases for hospitals acquired by a publicly traded PE backed hospital. Employment cuts also occur in hospitals acquired by non-PE acquirers, but skilled worker ratio does not increase in those hospitals. PE-backed acquirers, especially publicly traded ones, are also uniquely associated with reductions in overhead costs. Consistent with PE acquirers increasing skilled worker ratio, patient satisfaction scores do not decline at PE-acquired hospitals and even improve along some dimensions. In contrast, patient satisfaction significantly worsens at hospitals acquired by non-PE acquirers. Examining real patient outcomes, we find that PE acquirers are not associated with higher mortality and readmission rates at target hospitals than non-PE acquirers. Overall, our paper provides a comprehensive look at the role of PE acquirers in the hospital industry, and documents nuanced differences between PE and non-PE acquirers, as well as between PE backed acquirers with and without access to public capital markets. >more