Skip to main content
Knowledge and Training for Financial Decision Making!

NEWSLETTER of September 4, 2020


The following content has been added at finexpert:


Studies > Performance

OECD
ANNUAL SURVEY OF INVESTMENT REGULATION OF PENSION FUNDS AND OTHER PENSION PROVIDERS
The survey questionnaire covers all types of pension plans financed via pension funds and other pension providers. Where regulations vary depending on the type of plan (occupational, personal, mandatory, voluntary, DB, DC, etc), the tables identify the types of plan that the investment regulations apply to. The information collected concerns all forms of quantitative portfolio restrictions (minima and maxima) applied to pension funds at different legal levels (law, regulation, guidelines, etc). >more
 

Studies > Performance

Deutsche Bank Research
EUROPEAN BANKS SUFFER MORE THAN US PEERS IN THE CORONA CRISIS
Large banks in Europe have taken a substantial hit from the recession induced by the coronavirus. Their revenues dropped 5% yoy in the first half of the year and loan loss provisions spiked, essentially wiping out profits. Nevertheless, the CET1 ratio increased to 14% and the leverage ratio dipped only slightly to 4.8%. Total assets surged, driven by a massive increase in liquidity reserves at central banks, a boom in corporate lending and substantial government bond purchases. By comparison, the major US banks have weathered the crisis somewhat better so far. They remained moderately profitable, despite setting aside more funds to cover future loan losses. Their revenues grew 2% yoy, a stronger headwind from the Fed’s interest rate cuts notwithstanding. Capital ratios, however, appear less resilient than in Europe. >more

Studies > Corporate Finance

I-Advise
DEBT-EQUITY-SWAP: GESTALTUNG, BEWERTUNG UND VERHANDLUNGSSPIELRÄUME IM SANIERUNGSFALL
The highly important issue of debt-equity swaps is the subject of our comprehensive article in the M&A Review, in which we discuss the structuring options, valuation and negotiating scope of the conversion of debt to equity. Particularly in and after a crisis, the strengthening of equity through a debt-equity swap comes into focus. Although the overall capitalization remains unchanged for the time being, the improved balance sheet structure opens up further financing options and the company is relieved of debt service. On the other hand, the debt-equity swap also allows creditors to participate in the opportunities of the restructured company. >more
 

Studies > Alternative Investments

KPMG
VENTURE PULSE Q2 2020
So far, the Covid 19 pandemic has not had a particularly negative impact on the venture capital market. This conclusion can be drawn from KPMG's new Venture Pulse, for which global investments in venture capital are regularly evaluated. In the second quarter of 2020, for example, 62.9 billion dollars in venture capital was invested worldwide. This is almost as much as in the first quarter (63.8 billion). The total amount of venture capital invested was 10.1 billion dollars in Europe and around 1.79 billion dollars in Germany. The Berlin-based company N26 was able to raise 570 million dollars, putting it in second place in Europe. >more


Research Papers > Corporate Finance

CORPORATE CASH SHORTFALLS AND FINANCING DECISIONS
Rongbing Huang, and Jay R. Ritter
2020
Given their actual revenue and spending, most net equity issuers and an overwhelming majority of net debt issuers would face immediate cash depletion without external financing. Debt issuers tend to have short-lived cash needs while equity issuers often have persistent cash needs. On average, debt issuers immediately spend almost all of the proceeds, while equity issuers retain much of the proceeds in cash. Anticipated near-future cash needs and fixed costs of financing help explain the fraction of the proceeds being retained. Our findings support a funding-horizon theory in which cash needs and the nature of cash needs motivate financing decisions. >more

Research Papers > Alternative Investments

PUBLIC MARKET PLAYERS IN THE PRIVATE WORLD: IMPLICATIONS FOR THE GOING-PUBLIC PROCESS
Shiyang Huang, Yifei Mao, Cong (Roman) Wang, and Dexin Zhou
2020
We investigate the effect of pre-IPO investments by public market institutional investors (institutions) on the exit of venture capitalists (VCs). Results indicate that institutions' pre-IPO investments reduce IPO underpricing by mitigating VCs' reliance on all-star analysts to boost market liquidity. We conclude that institutions facilitate VC exits in the secondary market. Supporting this view, our analysis reveals that the presence of institutions allows VCs to exit with a reduced price impact in the secondary market. Consistent with the ease of exit, VCs offer fewer shares at the IPO and are more likely to invest in institutionally backed startups. >more

You are not a member?

Sign up here

Login

Forgot your password?