NEWSLETTER of October 7, 2022

The following content has been added at finexpert:

Bain & Company
CAN CONSOLIDATION, FEE GROWTH, AND OTHER MOVES REVERSE EUROPEAN BANKS’ DECLINE?
Many European banks, hobbled by several years of sluggish economic growth and the Covid-19 pandemic, find themselves ill-prepared to handle new economic shocks. Their financial health has been declining over the past few years, in contrast to most North American and UK banks. They desperately need to restore growth and healthier balance sheets through consolidation, new fee income streams, and other measures. These conclusions emerge from Bain & Company’s latest health check of the banking system, covering 636 banks across North America and Europe as of year-end 2021.  >more

Neuberger Berman
EQUITY MARKET OUTLOOK Q4 2022
We put out a cautious Equity Market Outlook three months ago, and after a quarter of worsening economic data and inflation trends we are now even more focused on low beta and high earnings quality. The outlook for the market and the economy that we laid out in our last quarterly note remains unchanged, and yet consensus narrative regarding whether we are in a bull or bear market has been as volatile as the market itself. Contrarians and bullish investors felt vindicated for a while, and offered base-case scenarios vastly at odds with our own: Inflation has peaked and is declining; that reduces the need for the U.S. Federal Reserve (Fed) to continue tightening; therefore the U.S. should avoid a recession; and therefore June marked the cycle trough in the S&P 500 Index, which could reach a new all-time high by year-end. >more

PwC
AUTOMOTIVE SECTOR WORKING CAPITAL REPORT 2022
The automotive industry has faced several major challenges in recent years: Lockdowns as a result of new corona waves, disrupted supply chains, sharp fluctuations in demand, and a shortage of key materials and components - cue the chip crisis - all took their toll on the industry. Despite these adverse conditions, companies managed to increase sales by nine percent between 2017 and 2021 and reduce capital lockup by one day. However, there are clear differences between manufacturers and suppliers: while original equipment manufacturers (OEMs for short) have been able to push the capital commitment period from 19 to 14 days since 2017, this key figure has risen to 56 days for suppliers over the past five years (up six days). These are the findings of a PwC analysis of 572 companies from the automotive industry worldwide, including 37 OEMs and 535 suppliers. >more

KfW Research
KFW-START-UP-REPORT 2022
The stock of innovation- or growth-oriented young companies in Germany has recovered. After the corona-induced dip in 2020, the number of startups rose to 61,000 in 2021. Female and male founders who want to use venture capital tend to have characteristics that facilitate VC access: they more often combine innovation and growth orientation, more often have an academic background, are significantly more likely to have digital offerings, Internet-based business models and international target markets. However, female start-up founders are less likely to seek VC funding. >more

UBS
INSIGHTS INTO PRIVATE MARKETS Q3 2022
Insights into Private Markets (IPM) is our next generation Real Estate Outlook (REO). IPM uncovers key insights across real estate, infrastructure, food & agriculture, private equity and private credit. Our private markets experts have provided a comprehensive analysis and answer some burning questions, looking at past performance, the present situation and forecasts of key sectors. They share their views about the forces currently shaping the private markets space, such as inflation, including the US Inflation Reduction Act, the war in Ukraine, the rise in food and energy prices, and the circumstances in which these factors may or may not work for individual investors. >more

DO INVESTORS CARE ABOUT IMPACT?
Florian Heeb, Julian F Kölbel, Falko Paetzold, and Stefan Zeisberger
2022
We assess how investors’ willingness-to-pay (WTP) for sustainable investments responds to the social impact of those investments, using a framed field experiment. While investors have a substantial WTP for sustainable investments, they do not pay significantly more for more impact. This also holds for dedicated impact investors. When investors compare several sustainable investments, their WTP responds to relative but not to absolute levels of impact. Regardless of investments' impact, investors experience positive emotions when choosing sustainable investments. Our findings suggest that the WTP for sustainable investments is primarily driven by an emotional rather than a calculative valuation of impact. >more

GENDER PAY GAP ACROSS CULTURES
Natasha Burns, Kristina Minnick, Jeffry M. Netter, and Laura T. Starks
2022
We employ a cross-country sample to examine whether cultural differences help explain gender compensation variations across corporate executives. The results show that the cultural differences, which are embedded in societies from long prior to the compensation decisions, provide significant explanatory power to the observed gender gap in executive compensation. Using an Oaxaca-Blinder decomposition combined with variables that have previously been shown to be significant determinants of executive compensation, we find that adding cultural measures to the model increases the explanatory power from 44% to 95% of the gender compensation gap. >more