NEWSLETTER of September 29, 2023

The following content has been added at finexpert:

Deutsche Bank Research
HISTORIC FIRST HALF FOR EUROPEAN BANKS: MORE PROFITABLE THAN EVER
The banking sector in Europe is benefiting from a set of conditions which have allowed for the strongest bottom-line result on record, even surpassing the pre-financial crisis peak of 2007. Rising interest rates have led to a surge in net interest income, asset quality remains sound and provisions therefore contained, and banks maintain tight cost discipline. Capital and liquidity levels continue to be robust, considerable returns to shareholders notwithstanding. European banks have also caught up with their US peers with regard to profitability ratios, for the first time in many years. Further gains in this benign environment may be harder to achieve though. >more

PwC
INDUSTRIALISIERUNG DES KREDITGESCHÄFTS 2023
Many German banks are no longer operating at the cutting edge of their most important business segment. This is shown by the PwC study "The Industrialization of the Lending Business 2023". The average level of industrialization in corporate banking is 41% and in retail banking 50%. A large number of the institutions surveyed are below the average value for the respective business area. In concrete terms, this means that even common processes such as "e-signature" or "online legitimation" have not yet been implemented. This is despite the fact that, due to the current economic situation and the entry of new competitors, customer acquisition and retention is currently of great importance for the banking market. >more

Lazard
INTERIM SECONDARY MARKET REPORT 2023
Lazard’s Interim Secondary Market Report for 2023 finds that buyer appetite in the secondary market remains resilient, as investors continue to deploy capital into diversified LP portfolios and best-in-class assets, despite the more challenging macroeconomic environment. The report identified two distinct market dynamics: In the LP-led segment, buyers and sellers continued to have difficulties with bid/ask spreads persisting. In the GP-led segment, secondary buyers expressed the need for higher returns and margins of safety. Such dynamics resulted in total secondary deal volumes in the first half of 2023 of approximately $43 billion, down by around 28% compared to H1 2022, with GP-led transactions accounting for 40% of overall volumes. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: SEPTEMBER 2023
With the end of the hiking phase in sight, investors focused on macroeconomic developments during the review period, while staying attuned to their policy implications. Government bond yields rose in advanced economies (AEs), with term structures reflecting increasingly diverse economic outlooks. Despite a spell of de-risking in August, risk-taking was generally resilient, including in emerging market economies (EMEs). Notable differences marked the evolution of government bond yields in China, the euro area and the United States. While US long-term yields reached highs not seen since before the Great Financial Crisis, such yields barely rose in the euro area. >more

FLIGHT TO SAFETY: HOW ECONOMIC DOWNTURNS AFFECT TALENT FLOWS TO STARTUPS
Shai Bernstein, Richard Townsend, and Ting Xu
2023
Using proprietary data from AngelList Talent, we study how startup job seekers' search and application behavior changed during the COVID downturn. We find that workers shifted their searches and applications away from less-established startups and toward more-established ones, even within the same individual over time. At the firm level, this shift was not offset by an influx of new job seekers. Less-established startups experienced a relative decline in the quantity and quality of applications, ultimately affecting their hiring. Our findings uncover a flight-to-safety channel in the labor market, which may amplify the pro-cyclical nature of entrepreneurial activities. >more

CHOOSING INVESTMENT MANAGERS
Amit Goyal, Sunil Wahal, and M. Deniz Yavuz
2023
We study how plan sponsors choose investment management firms from their opportunity set when delegating $1.6 trillion in assets between 2002 and 2017. Choice is related to (i) pre-hiring returns, and (ii) pre-existing connections between personnel at the plan (or investment consultant), and the investment management firm. Ex post, connections do not result in higher post-hiring returns. Relationships are thus conducive to asset gathering by investment managers but do not generate commensurate pecuniary benefits for plan sponsors. >more