The 2007 financial crisis served as a stark reminder of the vulnerability in the relationship between institutions and companies, as it revealed that many companies collapsed despite government ...interventions. Two crucial factors that influenced the crisis’s impact on firms were the level of creditor rights protection and corporate risk management. In this study, our aim was to investigate the impact of investment funds and banks on corporate risk prior to the 2007 financial crisis. We conducted an analysis across 21 countries to examine how institutional factors determined the influence of mutual funds and banks on corporate risk, ultimately leading to critical levels of collapse and the global spread of the financial crisis to the real economy. Additionally, we explored the role of mutual funds and banks as reference shareholders. The findings of our study reveal that the process of financial deregulation preceding the 2007 financial crisis contributed to an increase in corporate risk. In other words, financial deregulation facilitated greater involvement of institutional investors in companies, thereby encouraging the adoption of excessively risky and speculative strategies that were not necessarily aligned with the long-term sustainability of firms.
The article examines the peculiarities of legal regulation, emission and circulation of securities of joint investment institutions on the basis of which their comparative legal analysis was ...conducted for the first time. The subject of the study is the legal regime of securities of joint investment institutions – shares of corporate investment funds and investment certificates of unit investment funds. The purpose of the article is to study the features of the legal regime of securities of joint investment institutions – shares of corporate investment funds and investment certificates of unit investment funds, as well as to identify problems of their legal regulation. As far as methodology is concerned, in the course of the research general scientific and special legal methods of cognition were used. The comparative and legal methods made it possible to study the current legislation on the activities of joint investment institutions to establish common and distinctive features of securities of joint investment institutions. Methods of scientific induction and deduction provided an opportunity to investigate the legal nature of the relations that arise from securities of institution of joint investment. The problematic aspects of legislative regulation of securities of joint investment institutions were identified. The peculiarities of shares of corporate investment funds and investment certificates of unit investment funds were investigated. Common and distinctive features of securities of joint investment institutions were identified. Special attention is given to the fact that shares of corporate investment funds and investment certificates of unit investment funds, although assigned by the legislator in one category – securities of joint investment institutions, significantly differ in the legal nature of certifying relations. It is stated that the corporate investment fund shares give the investor of such a fund corporate rights instead of investment certificates of unit investment funds certify ownership. The article will be useful for practitioners in the field of law and economics, students of higher education, scientific and pedagogical workers of law and economics faculties, as well as all interested readers
Crisis phenomena and speculations in housing construction led to strict state regulations to attract financing and investments in this area. In addition, an additional participant (intermediary) was ...entered into the system of economic relations, whose mission is to supervise and control the timely execution of construction and installation works and the effective use of financial resources received from investors. One of the possible forms of functioning of such intermediaries is joint investment institutes. Orienting these institutions to satisfy the interests of various groups of participants – investors and developers – requires establishing an appropriate management information support system, which is mainly based on accounting data. At the same time, the issue of taxation of operations for financing housing construction through joint investment institutions is no less relevant. The article is devoted to disclosing the peculiarities of accounting and taxation of housing construction financing processes through the creation of joint investment institutions. The methodological basis of this research is the methods of imperative analysis, deduction, graphic and comparison. The legislative and normative regulation of the functioning of joint investment institutes, particularly for the needs of the organization of housing construction financing, has been studied. Proposals regarding the accounting of the activity of corporate and mutual investment funds, as well as operations involving their attraction of investments to finance housing construction are substantiated. The peculiarities of taxation of these transactions with income tax and value-added tax under the imperatives of Ukrainian tax legislation are characterized. The practicality of using joint investment institutes as a mechanism for financing housing construction in Ukraine was argued to minimize investment risks, control spending and tax burden planning.
Private Equity Performance: What Do We Know? HARRIS, ROBERT S.; JENKINSON, TIM; KAPLAN, STEVEN N.
The Journal of finance (New York),
October 2014, Letnik:
69, Številka:
5
Journal Article
Recenzirano
We study the performance of nearly 1,400 U.S. buyout and venture capital funds using a new data set from Burgiss. We find better buyout fund performance than previously documented—performance has ...consistently exceeded that of public markets. Outperformance versus the S&P 500 averages 20% to 27% over a fund's life and more than 3% annually. Venture capital funds outperformed public equities in the 1990s, but underperformed in the 2000s. Our conclusions are robust to various indices and risk controls. Performance in Cambridge Associates and Preqin is qualitatively similar to that in Burgiss, but is lower in Venture Economics.
In this paper, we analyzed the risk-adjusted performance of funds related to Environmental, Social and Governance (ESG-related funds), considering periods of financial constraints and the COVID-19 ...Pandemic. The database is comprised of 3,840 equity mutual funds in the period from January/2006 to December/2020. Each year, considering daily returns, we employed the Returns-Based Style Analysis to classify each fund as an ESG-related fund or a conventional fund; all funds in the category “Equities - Sustainability / Governance” were also considered as ESG-related mutual funds. Using daily data, for each year, the performance was estimated based on the four-factors model. The main results indicate that, on average, ESG-related funds presented higher risk-adjusted returns during periods of financial constraints. These results suggest that, during market downturns, investors tend to obtain better risk-adjusted returns for investing in green funds. A similar result was observed in relation to the COVID-19 period, suggesting that, based on the methods and procedures used, ESG-related funds achieved a better performance when compared to “conventional” funds during the Pandemic.
Investment funds are increasingly investing in other funds. I study the implications of this using Czech fund data from 2011 to 2022. Cross-fund holdings boosted diversification and returns, albeit ...with increased volatility. Moreover, the funds primarily sold fund shares compared to other assets to pay large redemption proceeds, especially during stressful periods. I then explore individual fund-to-fund redemptions and show increasing redemptions from funds experiencing outflows of investors. The relation is pronounced for shares held that are issued by less liquid funds, consistent with elevated strategic complementarity among the remaining investors that the funds seem to amplify further. Finally, the study investigates supportive behavior within fund families, finding evidence of increased purchases of constituents of those families that are subject to redemptions.
To rationalize the well-known underperformance of the average actively managed mutual fund, we exploit the fact that retail funds in different market segments compete for different types of ...investors. Within the segment of funds marketed directly to retail investors, we show that flows chase risk-adjusted returns, and that funds respond by investing more in active management. Importantly, within this direct-sold segment, we find no evidence that actively managed funds underperform index funds. In contrast, we show that actively managed funds sold through brokers face a weaker incentive to generate alpha and significantly underperform index funds.
Financial economics and corporate governance have long focused on the agency problems between corporate managers and shareholders that result from the dispersion of ownership in large publicly traded ...corporations. In this paper, we focus on how the rise of institutional investors over the past several decades has transformed the corporate landscape and, in turn, the governance problems of the modern corporation. The rise of institutional investors has led to increased concentration of equity ownership, with most public corporations now having a substantial proportion of their shares held by a small number of institutional investors. At the same time, these institutions are controlled by investment managers, which have their own agency problems vis-à-vis their own beneficial investors. We develop an analytical framework for understanding the agency problems of institutional investors, and apply it to examine the agency problems and behavior of several key types of investment managers, including those that manage mutual funds—both index funds and actively managed funds—and activist hedge funds. We show that index funds have especially poor incentives to engage in stewardship activities that could improve governance and increase value. Activist hedge funds have substantially better incentives than managers of index funds or active mutual funds. While their activities may partially compensate, we show that they do not provide a complete solution for the agency problems of other institutional investors.
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