Fund of funds gives Swiss investors option to deploy capital into SMEs

first_imgCompanies looking for financing would issue preferred shares for the fund in which asset owners can invest in.The proposal stems from research activity that Fahlenbrach conducted with his colleague Erwan Morellec, professor of corporate finance at EPFL, and Jean-Pierre Danthine, former vice president of the Swiss National Bank.It is based on the assumption that pension funds, or other institutional investors, often lack enough expertise and resources to carry out due diligence on companies.“The second problem is that the money a pension fund can deploy in a small and medium sized company, let’s say up to CHF5m (€4.5m), is not enough to carry out all the due diligence that it is necessary,” Fahlenbrach explained, adding that the solution is viable long term.Financing for small and medium sized companies in Switzerland is limited to own capital injection or a bank loan.“An entrepreneur that takes money from the bank has to pay back the debt and the interest, no matter the economic uncertainty, and in uncertain times, entrepreneurs may be reluctant to take loans because they do not know whether they generate enough revenue to pay interest and principal,” he said. “An entrepreneur that takes money from the bank has to pay back the debt and the interest, no matter the economic uncertainty”Rüdiger Fahlenbrach, professor at the Swiss Finance Institute of EPFLThe COVID-19 pandemic caused the Swiss GDP to fall by 2.6% in the first quarter of 2020, according to the State Secretariat for Economic Affairs (SECO).The Swiss government has given guarantees for SMEs emergency loans.“The government has essentially provided guarantees for about $17bn of bank loans, and we envision that the fund of funds could be started by converting these bank loans into preferred shares, held by the newly created fund.”Fahlenbrach stressed that the participation of the state does not make the fund public, but added that in uncertain economic times it would need capital from the government in the form of equity on top of money from institutional investors.“The state is necessary in the fund right now because there is still a level of uncertainty on whether the economy is going to recover, but when things are more stable, then the fund can run without the participation of the government,” he said.If the economy recovers, companies will not default and pay the dividends, the state may opt to divest its part in the fund to other investors, he added.So far, he said, the proposal has been pitched to bankers, while the essential question remains: is there interest from pension funds or institutional investors in such a fund of funds and appetite for this financial instrument?“I would hope so, because Swiss entrepreneurs would get access to a new source of funding that does not dilute their voting rights, and is not as strict as a bank loan,” Fahlenbrach said.“There are only so many public companies they could invest in, and the fund is an additional financial instrument to deploy money in Swiss francs that is not public equities, large corporate bonds or Swiss government bonds,” he added.To read the digital edition of IPE’s latest magazine click here. Swiss pension funds, and other institutional investors, may rely on a fund of funds instrument to invest in small and medium sized companies in times of crisis, Rüdiger Fahlenbrach, professor at the Swiss Finance Institute of the Ecole Polytechnique Fédérale de Lausanne (EPFL), told IPE.“In a fund of funds, a private company does the due diligence to find small and medium sized companies that need financing. It creates a large portfolio of preferred shares in the companies, and the pension fund or institutional investor then buys parts of the fund,” Fahlenbrach said, adding that the vehicle would lead to portfolio diversification.Another instrument to attract investments in the local economy, linked to the idea of fund of funds, is a new type of security – cumulative preferred shares – that offers more flexibility to companies.Fahlenbrach explained: “Preferred shares do not offer shareholders voting rights, there is no fixed maturity date to pay back a principal” and a company is allowed skip a dividend payment during difficult times, but such dividends are accumulated and paid at a later date.last_img read more

Crystal Palace fans delighted with signing of Jordan Ayew

first_imgThank you Mr. Parish you’re the best owner in the league xxx— sam 🎪 (@Roilionpapis) July 25, 2019 Absolutely Stupendous— G (@worldclasswoy) July 25, 2019 Black Stars striker, Jordan Ayew might have been the target of some criticism for large parts of his senior career but it seems the player is in line for a fresh start next season at Crystal Palace.Having spent last season on loan at the London club, Jordan has now signed a permanent deal keeping him at Selhurst Park for three more years.Despite not being the most prolific goalscorer for the club, with only two goals and two assists in 25 appearances last year, Jordan endeared himself to Eagles fans with his work rate and effort.His game-deciding strikes for the club certainly didn’t hurt his reputation with the club’s supporters either.center_img Jordan Ayew’s often ignored goalscoring prowess came to the fore at the just-ended African Cup of Nations tournament where he led the Black Stars to the Round of 16, scoring two of Ghana’s five goals at the competition.This has heightened the excitement of Palace fans who hope that he can replicate this fine form in the Premier League.last_img read more

Senators announce four more team members have tested positive for coronavirus

first_imgThe Senators announced Wednesday that four additional members of the organization have tested positive for COVID-19. Of the four people affected, it is believed that three are players and one is a staff member. The additional positive tests come after Ottawa had already made two separate announcements, one on March 17 and the other on March 21, that players on the team had contracted the coronavirus. The two unnamed players were the first confirmed cases in the NHL.Broadcaster Gord Wilson, who is well known for doing radio commentary for Senators games on TSN 1200, tested positive last week. However, according to The Athletic’s Hailey Salvian, he’s not included in the seven positive tests announced by the team so far. The Senators completed a road trip through California prior to the March 12 “pause” of the NHL schedule due to the global COVID-19 outbreak. They faced the Sharks (March 7), Ducks (March 10) and Kings (March 11).A total of 52 people traveled with the team on its road trip with 44 showing no symptoms, according to a press release from March 21. The eight that were symptomatic were tested for the coronavirus.All of the test results had been received as of Wednesday, with seven of them coming back positive. A statement on the Senator’s website said that all those who tested positive had recovered. The team also said it had instructed everyone in the traveling group to self-quarantine starting on March 13. MORE: NHL players pitch July restart; playoffs in August and September”The Ottawa Senators’ medical team continues to monitor players and staff and are following all appropriate and professional guidelines to help ensure the health and safety of our employees and the greater community,” the statement continued.The additional positive tests bring the total number of confirmed cases among NHL players to seven, with five on the Senators and two on the Colorado Avalanche. None of the affected players have been named as of yet.last_img read more

Credit Suisse and Google among 2019s highestpaying UK organisations

first_imgFinancial services organisation Credit Suisse, technology businesses Google and Microsoft and consultancy firm McKinsey and Company are among the top 25 highest-paying organisations in the UK, according to research by employment review website Glassdoor.Its 25 highest paying companies in the UK for 2019 report is based on UK employee salary reports that have been shared on Glassdoor between 1 March 2018 and 28 February 2019; this takes into account base salary as well as other forms of compensation, such as commission, tips and bonuses. To be considered for the final list, organisations must receive at least 30 salary reports within the reporting period.The report found that the median total compensation package across the UK’s highest-paying organisations, including base pay and bonuses, is between £61,000 and £90,000 a year.The highest-paying industry sectors are finance and technology; organisations such as Goldman Sachs, Bank of America and Just Eat all feature in the report with median total compensation packages of £74,000, £70,000 and £66,500 respectively.The top 10 highest-paying organisations in the UK for 2019 are:Credit Suisse: median total compensation of £90,000 and median base salary of £82,000.SAP: median total compensation of £90,000 and median base salary of £66,000.Deutsche Bank: median total compensation of £89,500 and median base salary of £80,000.Facebook: median total compensation of £89,000 and median base salary of £74,000.Standard Chartered: median total compensation of £85,000 and median base salary of £76,000.Salesforce: median total compensation of £85,000 and median base salary of £66,806.Dell: median total compensation of £84,825 and median base salary of £62,500.Oracle: median total compensation of £80,000 and median base salary of £66,250.UBS: median total compensation of £80,000 and median base salary of £75,000.Google: median total compensation of £78,000 and median base salary of £62,500.John Lamphiere (pictured), Europe, Middle East and Africa (EMEA) managing director at Glassdoor, said: “It is no surprise that multinational tech and finance firms dominate the list, given that both industries compete fiercely for talent, especially when it comes to tech roles.“While salary and bonuses might get people in the door, it is more likely to be culture and career progression that help people stick around in the long term.”last_img read more