NEWSLETTER of August 2, 2019

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to July 15, 2019 >more

Bain & Company

FIVE THINGS COMPANIES GET WRONG ABOUT CORPORATE VENTURE CAPITAL

Hundreds of companies are setting up corporate venture capital arms, hoping to tap into the foresight, energy and promise of technology innovators. Unfortunately, many squander the opportunity by managing these VC efforts the same way they would manage an M&A or business development unit—that is, too cautiously. Venture capital works best when it plays by a set of rules that are higher risk than most corporate executives are used to. VCs invest in innovations that are far from product-ready, and many fail to pan out—the price of developing unproven ideas. Corporate VC executives must be given latitude and permission to risk failure. >more

Roland Berger

CARVE-OUT MANAGEMENT: FOUR QUESTIONS TO SUCCEED

Carve-outs are among top managers’ favorites, because they have all kinds of potential. In the 2019 study "The carve-out challenge: A roadmap for success," consultants from Roland Berger explain what carve-out management is all about, and suggest four key strategic questions that each manager should ask him or herself to succeed. >more

Deloitte

PRIVATE EQUITY CONFIDENCE SURVEY - SUMMER 2019

The private equity (PE) market in Central Europe (CE) remains quieter than the 2017 heydey, which saw a number of large exits and fundraisings make headlines. The market may be reverting to an equilibrium, with a steady flow of mid-market deals supporting growing businesses in the region. We are also seeing increasing venture opportunities, both entries and exits, with a number of funds being raised in this space. >more

Ernst & Young

HOW CAN EUROPE RAISE ITS GAME? EUROPE ATTRACTIVENESS SURVEY 2019

Although Europe fares well compared with other regions, appetite to invest there has dropped to a seven-year low. A cocktail of economic and political uncertainty, not just in Europe but around the world, has caused businesses to throttle back on foreign investment. However, our 2019 survey of over 500 international businesses reveals that, compared to other regions, Western Europe is now considered more attractive than at any point in the last ten years as a place to establish operations. What’s more, Eastern Europe is now considered the second most attractive region for investment. Five years ago, it ranked only fourth. >more

WHAT DO INSIDERS KNOW? EVIDENCE FROM INSIDER TRADING AROUND SHARE REPURCHASES AND SEOS

Peter Cziraki, Evgeny Lyandres, and Roni Michaely
2019
We examine the nature of information contained in insider trades prior to corporate events. Insiders’ net buying increases before open market share repurchase announcements and decreases before SEOs. Higher insider net buying is associated with better post-event operating performance, a reduction in undervaluation, and, for repurchases, lower post-event cost of capital. Insider trading predicts announcement returns and, for repurchases, the long-term drift following events. Overall, our results suggest that insider trades before corporate events contain information about changes both in fundamentals and in investor sentiment. Information about fundamentals is incorporated slowly into prices, while information about mispricing is incorporated faster. >more

WHAT GOES WRONG IN M&AS? ON THE LONG-RUN SUCCESS FACTORS IN M&AS

Luc Renneboog, and Cara Vansteenkiste
2018
This paper provides an overview of the academic literature on the market for corporate control, and focuses specifically on firms’ performance around and after a takeover. Despite the aggregate M&A market amounting to several trillions USD on an annual basis, acquiring firms often underperform relative to non-acquiring firms, especially in public takeovers. Although hundreds of academic studies have investigated the potential determinants of M&A success, the wide variety of performance measures and sample sizes complicates the drawing of accurate and unambiguous conclusions. In this light, our survey compiles the recent literature and aims to identify which factors robustly contribute to and which factors hurt long-run deal success. We identify that long-run deal performance is affected by key determinants such as serial acquisitions driven by CEO overconfidence, acquirer-target relatedness and complementarity, and shareholder intervention in the form of voting or activism. >more