Gianfranco Gianfrate

Crowdfunding and Venture Capital:Substitutes or Complements?

The authors study the geographical and time series dynamics of crowdfunding and the degree to which it substitutes or it enhances venture capital (VC). Their findings support the argument that crowdfunding is a substitute of traditional VC for seed capital but it complements VC activity for subsequent rounds of financing. Consistently, they also find that crowdfunding activity clusters in the same main centers as venture capital financing.

Designing Carbon-Neutral Investment Portfolios

As climate change and global warming are addressed by tougher regulation, global investors are increasingly treating climate risks as a key aspect when pricing financial assets and deciding the allocation of their investment portfolios. However, the current approaches to embed the environmental profile in the investment process—exclusion lists, environmental ratings, active ownership, and carbon risk -adjusted valuation metrics—may not address effectively the concern that portfolios are exposed to growingly material risks associated to climate change. This chapter discusses to what extent financial hedging of institutional investment portfolios is feasible and how policy-making could shape markets and instruments to make the financial global system more resilient to possible climate-related regulatory shocks.

Who Is the Sovereign among Sovereign Wealth Funds?A Network Analysis of Co-Investments

This article studies the co-investment patterns of global sovereign wealth funds (SWFs) in the 1980–2014 period. Data show that collaborative investments are gaining momentum among SWFs. In terms of targets, large-capitalization stocks and companies operating in the infrastructure and public utilities industries appear to be the preferred targets. There is evidence of a home-bias effect and of a preference to invest in foreign countries in partnership with local funds. The co-investments within a social network framework show the existence of a “small world” of relationships among most SWFs. In particular, the network of co-investments is rather segmented, with some funds being “brokers” of relationships within their subgroup but with no one fund being able to dominate the strategies of the whole network.

Private Equity Investments in Banks

The authors investigate the performance change of 109 global banks that received private equity investments between 2000 and 2012. The investee banks experience significant improvements in operating profitability mainly due to increases in customer loans and the implementation of cost-cutting policies. Changes in leverage are not significant and have a very limited impact on banks’ performance post-investment. The increase in profitability is positively associated with the size of the acquired stake, suggesting that the larger the influence of the private equity fund on the target bank, the more effective the operating improvements.