NEWSLETTER of September 20, 2019

The following content has been added at finexpert:

Bain & Company

TRANSFORMING BUSINESS FOR A SUSTAINABLE ECONOMY

Climate change, unfair labor practices, corruption and other sustainability issues have become daily fixtures in newspaper headlines—and are rapidly taking their place alongside financial targets as top CEO priorities. Yet, the more that leaders work toward their early sustainability commitments, the more they discover how much further they need to go to prepare for a future where competitiveness and sustainability are inseparable. As sustainability best practices become more widely adopted, pioneering firms are taking a giant leap. They are pursuing the next practices that will allow them to achieve step changes in their business while helping to deliver a truly sustainable next economy. We believe that those who move first will unlock significant business benefits. >more

PwC

GLOBAL RANKING OF THE TOP 100 PUBLIC COMPANIES BY MARKET CAPITALISATION

This unique report ranks the top 100 global companies by market capitalisation and compares how the list has evolved since 2018 and over the past ten years, from March 2009 to March 2019. It identifies the risers and fallers, looks at regional and sector dynamics and provides a view on how the global landscape has changed. >more

UBS

SLOWER GROWTH AND MARKET PERFORMANCE: FIVE-YEAR CAPITAL MARKET EXPECTATIONS

UBS Asset Management’s Investment Solutions team conducts ongoing macroeconomic research to develop our baseline five- and 10-year return expectations. Drawing on the breadth and depth of expertise provided by more than 100 professionals and an over-36-year asset management track record, our capital market expectations quantify risk/return expectations for a broad set of asset classes, incorporate current market and economic conditions and provide a key component for modeling a portfolio’s strategic asset allocation. >more

European Systemic Risk Board

CAN ETFS CONTRIBUTE TO SYSTEMIC RISK?

The Advisory Scientific Committee of the European Systemic Risk Board has recently published a report presenting the main channels through which Exchange-Traded Funds (ETFs) have the potential to affect systemic risk. ETFs are hybrid investment vehicles that track an index or a basket of assets (typically referred to as “constituent securities”) and are continuously traded on liquid secondary markets. >more

STRESS TESTS AND SMALL BUSINESS LENDING

Kristle Romero Cortés, Yuliya S. Demyanyk, Lei Li, Elena Loutskina, and Philip E. Strahan
2018
Post-crisis stress tests have altered banks’ credit supply to small business. Banks most affected by stress tests reallocate credit away from riskier markets and toward safer ones. They also raise interest rates on small loans. Quantities fall most in high-risk markets where stress-tested banks own no branches, and prices rise mainly where they do. The results suggest that banks price the stress-test induced increase in capital requirements where they have local knowledge, and exit where they do not. Stress tests do not, however, reduce aggregate credit. Small banks seem to increase their share in geographies formerly reliant on stress-tested lenders. >more

ADVERSE SELECTION AND THE PERFORMANCE OF PRIVATE EQUITY CO-INVESTMENTS

Reiner Braun, Tim Jenkinson, and Christoph Schemmerl
2018
Investors increasingly look for private equity managers to provide opportunities for co-investing outside the fund structure, thereby saving fees and carried interest payments. In this paper we use a large sample of buyout and venture capital co-investments to test how such deals compare with the remaining fund investments. In contrast to Fang, Ivashina and Lerner (2015) we find no evidence of adverse selection. Gross return distributions of co-investments and other deals are similar. Co-investments generally have lower costs to investors. We simulate net returns to investors and demonstrate how reasonably sized portfolios of co-investments significantly out-perform fund returns. >more