NEWSLETTER of September 5, 2025

The following content has been added at finexpert:

UBS
GLOBAL INVESTMENT RETURNS YEARBOOK 2025
The Global Investment Returns Yearbook, a body of work assembled by Professor Paul Marsh and Dr. Mike Staunton of London Business School and Professor Elroy Dimson of Cambridge University, has established itself as the definitive source for the analysis of the long-term performance of global financial assets. The 2025 edition, launched today by UBS Investment Bank and UBS Global Wealth Management’s Chief Investment Office, marks something of a milestone, providing us the opportunity to compare the first quarter of the 21st century’s market performance with that of the 20th century. This edition also includes a deep dive on diversification. >more

Bundesverband deutscher Banken
UNTERNEHMENSFINANZIERUNG AKTUELL - SEPTEMBER 2025
Germany’s overall economic output fell by 0.3 percent in the second quarter of 2025 compared with the previous quarter, and prospects for the second half of the year remain subdued. EU US tariff agreements aim to provide companies with greater planning certainty, with the focus on transatlantic free trade and expanding trade and investment partnerships. Government measures in Germany including a special fund, tax incentives, and tariff agreements demonstrate policy action and are supported by the “Made for Germany” initiative, but further reforms are needed to maintain competitiveness. Corporate credit demand remained weak in the second quarter, with hopes for improvement in the latter half of the year. Addressing affordable housing requires faster, larger, and more cost effective construction, supported by digitalized permitting, flexible building standards, and efficient subsidies. >more

Amundi
PRIVATE DEBT AT A TURNING POINT: RISKS AND OPPORTUNITIES AS THE INDUSTRY SCALES UP
Growing allocations to Private Debt are driving some convergence with Public Debt, although both continue to exhibit distinct behaviours. The scale up of the market is driving partial convergence in risk perception and processes, yet material differences persist — notably the performance drivers — creating complementary, not fully substitutable, opportunities for diversified fixed income portfolios. Going forward, we’ll see more retail investors allocating towards private debt. This means the industry needs to evolve and develop new products and structures that are suited to retail investors’ needs. This includes evergreen funds, development of a secondary market, lower minimum investment requirements as well as enhanced reporting and fintech distribution to improve liquidity.  >more

KfW Research
WENN POLITIK DIE ZINSEN DIKTIERT: DIE UNABHÄNGIGKEIT DER FEDERAL RESERVE IM STRESSTEST
For decades, the independence of central banks has been regarded as a key guarantee of appropriate price developments and economic reliability. In the US, however, this principle is coming under increasing pressure. Donald Trump is increasingly attempting to exert direct influence on the Federal Reserve and fill key positions with his supporters. This means that the Fed is facing potential politicisation, which could have far-reaching consequences. A particularly critical scenario would be one in which the US economy slips into stagflation, i.e. stagnant growth coupled with high inflation. If, in such a situation, the Fed were to be politically forced to keep interest rates low, there would be a risk of an inflationary spiral, a loss of confidence in the financial markets and rising financing costs despite low key interest rates. The coming months could therefore be decisive in determining whether the Federal Reserve will retain its role as an independent anchor of stability. >more

PUBLIC SENTIMENT DECOMPOSITION AND SHAREHOLDER ACTIONS
Reena Aggarwal, Hoa Briscoe-Tran, Isil Erel, and Laura T. Starks
2024
Employing a novel approach with unique data on public sentiment and a new metric on shareholder concerns, we establish an association between shareholder actions and public sentiment about a firm. The number of shareholder proposals effectively captures investor dissatisfaction, particularly since it includes firms with no shareholder proposals. We find that negative public sentiment about financial, governance, environmental or social issues is associated with more shareholder proposals, and we establish causality through a creative instrumental variable approach. Further, shareholder actions have real consequences as a larger number of shareholder proposals appears to result in higher turnover for CEOs and directors. >more

CAPITAL STRUCTURE & FIRM OUTCOMES: EVIDENCE FROM DIVIDEND RECAPITALIZATIONS IN PRIVATE EQUITY
Abhishek Bhardwaj, Abhinav Gupta, and Sabrina T Howell
2025
We study the effect of a large increase in firm leverage. We isolate the independent, causal effect of debt using the setting of private equity-sponsored dividend recapitalizations, where companies take on debt to pay investor returns, and opportunistic responsiveness to credit supply permits a causal design. After accounting for positive selection, higher total debt (84% on average) dramatically increases the chance of financial distress (by 2.4 times the targeted firm mean), in line with Altman-Z calibrations. Dividend recapitalizations increase deal returns but reduce fund returns, possibly reflecting moral hazard. They also reduce employee wages and loan prices for pre-existing creditors. >more