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Private Debt Fund Returns, Persistence, and Market Conditions
Get PDFThis paper examines net-of-fees private debt fund performance, performance persistence across funds managed by the same general partner and a general partner’s ability to time the market. We document that private debt funds outperform bond and equity market benchmarks in the cross-section, with high performance dispersion across strategies and performance quartiles. Lagged performance significantly affects current fund performance. While ex ante and ex post credit market conditions strongly affect fund performance, general partners can only partially time them.We thank the editors, two anonymous referees, M. Da Rin, P.P.M. Joos, F.A. de Roon, J.J.A.G. Driessen, P.G.J. Rosenboom, A. Verriest, D.J.D. Cummings as well as seminar participants at Ghent University, for valuable comments on previous ver sions of the paper. We acknowledge Remaco for the use of the Preqin data
The Importance of Board Risk Oversight in Times of Crisis
No full textThis study investigates the relationship between board risk oversight practices at financial institutions in the EU and systemic risk during the sovereign debt crisis. More specifically, we examine whether European banks and insurance companies that had strong board-level risk oversight in place before the onset of the sovereign debt crisis fared better during the crisis. We construct a risk oversight index based on publicly available, hand-collected data, which captures the strength of the institutions’ board-level risk governance practices. We find that financial institutions with stronger board risk oversight prior to the crisis were less vulnerable to the sovereign debt crisis, after controlling for other factors. The results are consistent and economically relevant for SRISK, probability of default, and Delta-CoVaR, three measures of systemic risk that are commonly used in the context of financial institutions
EMAC Annual Conference 2022, Proceedings
No full textCompanies increasingly include sustainability claims in their marketing and communication towards customers. Often firms assume that these customers have a non-ambiguous understanding of sustainability and suppose that the environmental dimension is the dominant consumer association. Using CFA applied to cross-national data from 7 countries, we find that consumers meaningfully distinguish social and environmental aspects when defining sustainability. Our results show that the environmental dimension is key but that the importance gap between both dimensions declines when consumers identify reasons to boycott brands. As consumer boycotts are an increasingly trending phenomenon, we show that social sustainability facets are important drivers of consumer boycotts. Based on our results, we conclude that firms that set sustainability priorities based on how they think consumers define sustainability might misfire, as social aspects might be underestimated as key drivers of boycott behavior
A constitutive view on entrepreneurship through acquisition : Towards a conceptual framework
No full textThe purpose of the thesis is to analyze the phenomenon of “Entrepreneurship through Acquisition” or ETA. An ETA transaction as opposed to a buyout is defined here as a smaller and more entrepreneurial version of the classical leveraged management buy-in. Previous research on entrepreneurship and transitions into entrepreneurship, have always been predominantly focused on start-up entrepreneurship. ETA is a relatively widespread phenomenon and an alternative way to become an entrepreneur. The main focus here lays onthe study of the middle-aged senior (nascent) ETA entrepreneur. Besides making a typology of the nascent and actual ETA entrepreneur, the influence of different forms of entrepreneurial capital and the likelihood of ETA entrepreneurial entry has been analyzed in the first part of the thesis. While work and/or managerial experience, prior start-up or shareholdings and parental background do not have a significant impact on the likelihood of becoming an ETA entrepreneur, self employment, the higher the amount an ETA entrepreneur is prepared to invest and a certain age do increase the odds of acquiring a company. A second part of the thesis analyzes the investment criteria of an ETA manager, while comparing them between nascent and actual ETA managers and comparing them with the IC of other types o similar investors like private equity (LBO and MBI), venture capital, business angels and search funds. The latter and the MBI investors being the most similar. “Potential market growth”, “professionalization and improvement potential”, as well as “stable demand and recurring customers” were found to be the three most important investment criteria, showing little differences, except for “location” and “technology”, between the nascent and actual ETA entrepreneur. Three criteria, i.e. “potential market growth”, “technology” and “sales turnover” have the strongest significant influence on whether a company finally gets acquired or not. A third part of the thesis measures the social identities of the (nascent) ETA entrepreneurs and their impact on the nascent-active gap. Using the framework of Fauchart & Gruberfor founder identities measured by the scale developed by Sieger et al., the Darwinian founder social identity is the predominant social identity of the (nascent) ETA entrepreneur. On the other hand, no significant relationships between one of the social identities and the likelihood to actually become an active ETA entrepreneur in a given time period compared to when they do not have this identity, were found
The future of the reward profession. More stakeholder-driven, more strategic and more digital
No full textReporting on executive remuneration is proof of transparency and a key characteristic of good governance. Moreover, proxy advisors, and shareholders in general, strongly rely on the remuneration report for assessing the link between pay and performance, and in order to find out to what extent the executive remuneration policies also put the focus on sustainability and ESG performance. We also see an evolution towards broadening the scope of the remuneration report by providing information on the overall remuneration policy applied by the firm to all its employees. In some companies, the remuneration report also provides information on the topic of equal pay. Taking all this into account, it will be no surprise that firms are eager to learn from each other and to be informed about the latest evolutions and trends in executive remuneration reporting. Consequently, and as a follow-up to a previous white paper, ‘Executive Remuneration Reporting in Europe’, the Executive Remuneration Research Centre has selected 10 interesting practices related to the disclosure on executive rewards. In order to do this, we have focused on UK firms’ remuneration reports, as experience has taught us that the UK is a frontrunner in the field of executive reward disclosure. High-level company performance overview. Overview of the remuneration policy and its relationship to strategy. Brief overview of granted remuneration (Ex-ante) information on KPIs driving incentives and strategic logic (Ex post) information on realised performance and impact on incentives. Required shareholdings. Remuneration Committee activities during the financial year. Stakeholder engagement in executive remuneration. Compliance with applicable corporate governance code. Company-wide remuneration Framework
Business-nonprofit partnerships: How can they pave the way for social imprint, social contagion and ultimately social transformation
No full textThe mode of actualization of agile inspired organization design in a large and complex firm
No full textInnovative Technology at the Interface of Finance and Operations
No full textThe financial services industry covers banks, insurance companies and investment managers, as well as transaction or message processing companies. To streamline billions of daily transactions, lean principles and operational excellence programs have found their way to financial service firms. Today, the resulting cost and risk reductions are further enhanced by embracing new digital technologies–such as those falling under the umbrella of Industry 4.0. These digital technologies stimulate a new wave of operational efficiency improvements by making processes more automated, autonomous, and smart. We provide a framework to evaluate the transition towards digital, autonomous and smart operations in financial services. We report our findings from the digital operations journey of Euroclear, a service provider of settlements for securities transactions, on their quest for increased automation and autonomy. We also shed light on the potential of artificial intelligence in financial services. Data-driven solutions may support financial service firms from purely descriptive models and methods with strong predictive power, towards prescriptive decision-making algorithms