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Private equity investors acquire companies, aim to increase the company’s corporate value and thus aim at selling the respective company at a profit after some time. To increase the value of their portfolio companies, private equity investors employ three main value creation strategies. Financial leverage, multiple expansion, and operational value creation. There has been a significant shift in importance between these three value drivers. While in the 1980s more than 50% of value creation was achieved by leveraging equity with the help of debt capital, this value driver only accounted for 15% in the 2010s. Instead, the value driver operational value creation has gained significantly in importance. It alone accounted for 55% of total value creation in the 2010s, more than financial leverage and multiple expansion combined. The aim of this thesis is to answer the question which operational value creation levers private equity investors use to increase the value of their portfolio companies during the holding phase. In addition, the thesis deals with the question of operational value creation drivers of the future. These are derived based on prevailing megatrends of the future. Research on the operational value drivers used by private equity investors revealed that these drivers can be assigned to three main aspects.
These aspects are, on the one hand, financial aspects, where private equity investors take measures to improve working capital. Moreover, within the framework of financial aspects private equity investors influence the cost structure as well as the cost of capital and the capital structure. Furthermore, private equity investors assert influence on the governance structures of their portfolio companies. For the aspect of governance, measures such as replacement of management/change of management structure, monitoring and controlling as well as incentive systems were identified to increase the value of the company. Another identified aspect for value creation are strategic aspects. In terms of strategic aspects, private equity investors use the levers of mergers and acquisitions, organic expansion, outsourcing/insourcing as well as product and pricing strategies.
The research on the value creation levers that private equity investors will have to apply in the future in order to ensure value creation of their portfolio companies is based on the megatrends of digitalization, demographic change and sustainability. The research revealed the implementation of digitalization measures, employee, and talent management as well as the implementation of ESG criteria.
This thesis has structurally outlined value drivers that contribute to value creation in private equity investments. The research also showed that value creation levers taken can directly and indirectly influence the value of the portfolio company. Value drivers II with a direct effect on the change in equity value affect either revenue, margin or net debt, while the indirect value drivers affect the valuation multiple.
This paper analyses five different Cryptocurrencies, namely Bitcoin, Ethereum, XRP, Dogecoin and Litecoin, and studies their impact on traditional financial portfolios under different allocation strategies. The allocation strategies under consideration in this paper are the modern portfolio theory according to Markowitz, an extension of it such as the tangency portfolio, and the equally weighted portfolio. Further, this study explores the effect on the efficient frontier when Cryptocurrencies are added to the efficient portfolios. In addition to that, the paper aims to examine whether the mean – variance portfolio optimization according to Markowitz outperforms the naïve and tangency portfolio strategy. The portfolio performance is evaluated based on the Sharpe ratio. The quantitative analysis of this paper covers the time period from 2017 to 2022, in total five years. In accordance with the existing literature on portfolio optimization with Cryptocurrencies, the study reveals that besides some issues related with Cryptocurrencies such as cybercrime and a lack of regulations, Cryptocurrencies can be beneficial for portfolio diversification with traditional financial assets. Referring to the portfolio strategies, the study highlights that the optimal mean – variance portfolio and tangency portfolio do not differ significantly in terms of Sharpe ratio. However, both strategies outperform equally weighted portfolios.
In the context of the global climate crisis, socially responsible investing has gained momentum in the financial market. One of its objectives is the achievement of a positive environmental impact. Among the instruments used for this purpose are green bonds. These are fixed-income instruments whose proceeds may only be used for green activities. To this point, market-based standards aimed at establishing uniform definitions of what constitutes “green” have strongly contributed to the development of the green bond market. In order to further promote the issuance and credibility of green bonds and exploiting their financing potential, the European Commission has proposed the introduction of a European Green Bond Standard.
This thesis examines how an introduction of the European Green Bond Standard could impact the existing German green bond market and lead to more private investments in green projects in the future. To address this question, information from an extensive literature review as well as quantitative data from Refinitiv EIKON's Green Bond Guide was used.
For the German green bond market to grow, in particular an increased involvement of the private sector is essential. This thesis finds that the current draft of the European Green Bond Standard offers great potential in this respect. Through increased transparency and assurance, increased demand as well as associated reputational benefits and the possibility to use targeted policy incentives it has the potential to increase the attractiveness of green bond issuance for the private sector and thus induce more issuances. An extension of the grandfather clause, which is currently under discussion, could underpin this even further.
The paper tests the German stock market for excess volatility and stock price overvaluation with regard to the simple efficient markets model and the cyclically adjusted price-earnings ratio. Long-term historical stock market data of 49 years are used to calculate the detrended real price and ex-post value and data of 39 years to compute the cyclically adjusted price-earnings ratio, both from the sample of two German automotive stocks. The empirical evidence provided by the analysis points to excess market volatility and confirms the theory of overvalued stocks, which is linked to the bubble theory. This indicates that price fluctuations cannot be justified only by changes in fundamental values as claimed by the Efficient Market Hypothesis. The German stock market therefore shows inefficiency.
Digitalization is currently taking place in all areas of the business environment. This thesis aims to provide an overview of digitalization in the field of controlling, specifically focusing on the use business intelligence (BI) dashboards. Embracing digitalization by implementing BI enables companies to transform the way in which data and information relevant for decision making is procured and managed. The utilization of a BI solution to conduct complex analyses is exemplified by the conceptualization and development of a BI dashboard for assessing the consolidation effect at Bosch Rexroth AG. The importance of designing an effective dashboard according to its purpose in a simple, clear and intuitive way as a front-end application of a BI solution is emphasized. Furthermore, five different potential roles for the controller that arise as digitization progresses are identified, all of which require an expansion of the controller's IT capabilities.
SPACs are an alternative way for companies to access the capital market. They have experienced a boom since 2020, and in the following year 613 SPACs raised more than $160 billion in the US. However, SPACs are controversial and have been criticized for bad performance and incentive misalignments. This bachelor thesis aims to examine whether the current US SPAC boom is a temporary phenomenon or whether SPACs represent a long-term alternative to the traditional IPO process. To answer this research question, a literature review and 14 semi-structured expert interviews were conducted to explore the reasons for the boom, the advantages and disadvantages for companies seeking to go public, and the winner and losers of the SPAC process. This work shows that SPACs had already gained acceptance in the market before the boom, and it argues that SPACs are a viable alternative to the traditional IPO process for young, risky companies due to the regulatory advantages and the support of SPAC sponsors. In addition, the majority of key SPAC stakeholders are winning in the SPAC process and are likely to continue to support the market in the future. At the same time, this paper finds that the Corona pandemic was an important catalyst for the SPAC market, but that the associated reasons for the boom will probably recede. Moreover, PIPE investors will be more selective in the future and sponsors without appropriate expertise and network will have to liquidate their SPACs more often. This bachelor thesis therefore concludes that SPACs will continue to exist. However, there will be fewer and higher quality SPACs in the future.
The project business in the packaging machine industry is highly volatile. Although the industry is steadily growing, firms face increasing financial constraints due to external, difficult to control, factors. This thesis examines the underlying concepts and processes of a Supply Chain Finance implementation, using the Syntegon Group as an empirical example. Due to the extended payment terms of customers and the currently undergoing refinancing measures, the analysis about potential liquidity increasing measures becomes extremely relevant for Syntegon. The research questions covered focus on cash liquidity increases, working capital improvement and alternatives to Supply Chain Finance solutions.
This research aims to provide an informed recommendation about the implementation of Supply Chain Finance. The research is divided into two major parts. The first part discusses the underlying theoretical frameworks to understand the concept of working capital and supply chain management. These concepts are of great importance for the understanding of Supply Chain Finance and its relevance in today’s globalized world. The second part focuses on a detailed empirical analysis of the Syntegon Group. Hereby, the qualitative research involves expert interviews with various departments of the Syntegon Group. The answers of the interviewees are evaluated based on the different categories. This allows for a direct comparison of the interviewee’s answers.
The quantitative analysis consists of the key figure analyses. These allow an informed statement about the current financial situation of the group. By calculating potential payment term extensions and the consequential cash flow opportunities, an estimation about the benefit of the implementation of Supply Chain Finance can be made. Lastly, the cost-benefit analysis of implementing such a solution versus receiving the money as a bank loan is determined.
The results of the calculation and analyses have shown that payment term extensions offer large cash flow opportunities for the Syntegon Group. Receiving a bank loan in the same amount as the unlocked working capital would result in a lower benefit.
Although further research beyond this thesis is needed, the clear benefits of implementing a Supply Chain Finance solution to increase liquidity are demonstrated.
The current dashboard reporting of the Key Account Management of Adolf Würth GmbH & Co. KG indicates that management reporting in companies is still characterized by extensive manual effort, although various digitalization technologies offer possibilities to make reporting more efficient and effective. Therefore, this thesis deals with the digital transformation of controlling and primarily one of its central components - reporting. The main technologies available for reporting purposes will be identified by examining relevant literature. Regarding the manual dashboard reporting of the Key Account Management of Adolf Würth GmbH & Co.KG, requirements and recommendations for the conceptualization and implementation of a digital reporting will be described and summarized. It can be stated that the requirements differ from traditional reporting in many aspects, and it is recognizable that an interaction of different dashboard reporting elements is essential to establish a successful, digital reporting solution. As a result, it has been shown that an automated dashboard based on a BI-infrastructure has led to an enhancement in productivity and an extended information basis. Furthermore, it will be discussed that the challenges of new processes are driving controllers to extend their competence profiles.
The following study examines the influence selected variables have on the price of the cryptocurrency Bitcoin by utilizing a multiple linear regression model. Data of 267 observations for each variable during a five-year period from 13 August 2016 to 1 October 2021 are analyzed. The results present empirical evidence on the relationship of Bitcoin and external determinants such as traditional financial assets, in particular the stock market, the bond market, domestic currencies, the real estate market, gold, and the popularity of Bitcoin, represented by a Google Trends analysis. The findings imply that only the stock market and the real estate market proxies significantly influence the price of the cryptocurrency Bitcoin.
Das Ziel der vorliegenden Arbeit ist es, die vorhandenen Maßnahmen zur Prävention von Bilanzmanipulation und die Instrumente zur Aufdeckung auszuwerten, sowie die Maßnahmen zur Stärkung der Unabhängigkeit der Wirtschaftsprüfung im Zuge der Verabschiedung des Finanzmarktintegritätsgesetz auszuleuchten und auf seine Wirksamkeit zu prüfen. Im Rahmen dieser Bewertung wird die Funktion und Verantwortung des Wirtschaftsprüfers in Hinsicht auf die Regelwerke und Berufspflichten dargelegt, sowie darauf aufbauend die verschiedenen Arten und Hintergründe der Bilanzmanipulation beschrieben. Im Zusammenhang mit dem Bilanzskandal der Wirecard AG werden die Schwachstellen der Bilanzkontrolle aufgezeigt und mit den neuen Regulierungen in einem Vergleich gezogen. In Anbetracht der vorhandenen Risiken der Bilanzmanipulation, erfüllen die neuen Reformen ihren Beitrag zur Stärkung des Sicherheitssystems im Finanzmarkt und erschaffen dementsprechend gute Voraussetzungen für eine frühzeitige Aufdeckung und Verhinderung der Bilanzmanipulation.
The aim of the present work is to evaluate the existing measures to prevent balance sheet manipulation and the instruments for detection, as well as to examine the measures to strengthen the independence of auditing in the course of the adoption of the Financial Market Integrity Act and to examine their effectiveness. As part of this assessment, the function and responsibility of the auditor with regard to the regulations and professional duties is explained, and based on this, the various types and backgrounds of balance sheet manipulation are described. In connection with the scandal of the company Wirecard AG, the weaknesses in the control are identified and compared with the new regulations. In view of the existing risks of balance sheet manipulation, the new reforms fulfill their contribution to strengthening the security system in the financial market and accordingly create good conditions for early detection and prevention of balance sheet manipulation.