Stefan Prigge

Diversification Properties of Investments in Shipping

In contrast to the more established alternative asset classes like real estate or hedge funds, there is not much research available for investments in shipping. This article contributes to closing this gap in the literature and investigates the diversification properties of investments in shipping. During the sample period, an investment in shipping stocks earned an attractive risk-return combination. In general, the addition of an investment in shipping stocks to a base portfolio of stocks and bonds enhanced diversification. The results also reveal other insights. First, the composition of the shipping stocks portfolio mattered much. Compared with the MSCI World Marine Index, which is a capitalization-weighted aggregate of 10 stocks, the diversification benefit of the broader and equally-weighted shipping stocks portfolio of our Research Index, with 41 stocks, was much more pronounced and somewhat statistically significant. Second, diversification properties were not stable through the course of time with larger diversification benefits during the bear market from March 2000 to March 2003 compared to the bull market from April 2003 to October 2007. The positive overall view of the diversification properties of shipping stocks is based on a single full stock market cycle.

Investing in times of inflation fears: Diversification properties of investments in liquid real assets

The financial crisis and the rescue measures taken by governments and central banks increased investors’ interest in liquidity and in real assets supposed to offer a hedge against inflation. Against this background, we investigate empirically four real assets (real estate, commodities, infrastructure, and shipping) for which there are investment instruments available that trade in liquid markets. Our empirical study using data from 1999 to 2009 yields several results: First, in most cases, the addition of real assets improved portfolio performance in comparison with a base portfolio consisting only of standard stocks and bonds. Second, the time frame chosen for the analysis matters very much. This is bad news for investors, because there is no such thing as the single true time frame for this purpose. Third, despite significant conceptual differences, our four different performance measures led to the same conclusions. This result is interesting for investors beyond our specific setting, because the selection of a specific performance measure from the vast supply of such measures does not seem to matter much. Fourth, although we focused on a certain way to invest into the discussed real assets, investors have different alternatives for investing. These alternatives share specific characteristics and reflect certain advantages and disadvantages.

Über den Nutzen von Corporate-Governance-Ratings für Aktionäre

In den letzten Jahren ist ein Markt für kommerzielle CorporateGovernance-Ratings entstanden. Exemplarisch werden die Ratingkonzepte von vier wichtigen Anbietern betrachtet. Allerdings ist der Nutzen kommerzieller CG-Ratings für den Aktienanleger derzeit eher skeptisch zu beurteilen: Die wissenschaftliche Forschung kann kaum klare Aussagen über den Zusammenhang zwischen Corporate Governance und Unternehmenserfolg machen, und es wäre überraschend, wenn private Anbieter hierzu wesentlich besser in der Lage wären. Ferner ist schwer zu erkennen, inwieweit die Anbieter private Informationen in ihre Ratings einfließen lassen können, was Voraussetzung dafür ist, dass Anleger an Aktienmärkten mit mittelstrenger Informationseffizienz auf der Basis von CorporateGovernance-Ratings Überrenditen erzielen können. Dennoch ist zu hoffen, dass sich der Markt weiter entwickeln wird, denn von ihm könnten wertvolle Impulse ausgehen. Die mächtige Triebfeder kommerzieller Aktivität könnte die Erforschung der Zusammenhänge zwischen Corporate Governance und Unternehmenserfolg vorantreiben und Schrittmacherdienste für Forschung und Regulierung leisten.

Valuation Efficiency of Secondary Markets for Formerly Illiquid Assets: The Case of German KG Ship Funds

Until the outbreak of the most recent shipping crisis in late 2008, German KG ship funds had been a prominent vehicle for investing in, and financing of, global shipping operations. Given that KG shares are not designed to be traded, investors are expected to require higher returns as compensation for illiquidity. Since the early 2000s, secondary market platforms for trading of shares in ship funds emerged. If investors could sell their shares at prices reflecting the fundamentals of their asset, lower returns would be demand. Making use of a novel methodological approach, 341 transactions of container ship funds executed from 2007 through 2012 are analyzed. The results reveal a surprisingly high fundamental-valuation efficiency: The identified pricing-relevant variables explain about 86% of the variations in the secondary market valuations of the ship funds. However, it is documented that shares in ship funds trade at discount relative to fundamental asset values.

Überwachung der Vorstandstätigkeit

Die Uberwachung der Geschaftsfuhrung ist die wichtigste Aufgabe des Aufsichtsrats. Im Zentrum des Interesses steht dabei meist der Teil, der hier als traditionelle Uberwachungsfunktion des Aufsichtsrats bezeichnet werden soll. Dazu liegt ein enormer Bestand an juristischer und betriebswirtschaftlicher Literatur vor. Bei weitem weniger Aufmerksamkeit hat bislang die Funktion erfahren, die man in Anlehnung an den juristischen Sprachgebrauch als Gehilfenfunktion des Aufsichtsrats fur die Partizipation anderer Gruppen an der Corporate Governance eines Unternehmens bezeichnen konnte. Auch ihr soll in diesem Aufsatz einiger Raum gewidmet werden. Doch zunachst sei die traditionelle Uberwachungsfunktion naher betrachtet.

Corporate Governance Codes: How to Deal with the Bright and Dark Sides of Family Influence

This study examined how corporate governance codes specific to private family firms encourage the bright side and restrict the dark side of family influence. Moreover, it investigated whether these codes foster agency or stewardship tendencies of the family’s involvement in the business. The results of this qualitative research study revealed that the eight analyzed codes are not consistent in their recommendations and focus on different aspects of family influence. Nevertheless, some common recommendations could be identified—for instance, the relevance of family governance mechanisms to avoid conflicts.

The Attractiveness of Investments in Listed German Family Firms: Reality or Deception Caused by Indexes Applying Backtest Data?

Taking the example of Germany, this article analyzes whether listed family firms are an asset class on their own with attractive diversification properties. Family firms have become increasingly popular since the most recent financial crisis because they are assumed to do business in a more honorable manner and with a longer-term perspective. Family firm research has collected some theoretical and empirical evidence substantiating that family firms could indeed behave differently compared with their non-family peers, thus supporting the expectation of attractive diversification properties. The empirical analysis applies available family firm stock indexes for an inexpensive quick check. At first sight, the results for the longest time series seem to support the premise that family firm shares indeed do have favorable diversification properties. However, they seem to have disappeared in the more recent time frame. The reason for this is unclear, as the practice of index providers to lengthen the time series of their indexes with simulated past performance based on the launch date portfolio might have also affected the results (survivorship bias), thus demonstrating the potential pitfalls of a quick check. Nevertheless, the findings of family firm research indicate that it could be worthwhile to go beyond this quick check. Recommendations as to how to advance the analysis of investments in listed family firms to the next level are provided.

Remuneration-based incentives in a global bank before and after Lehman: the case of Deutsche Bank

This chapter analyses performance-based incentives for members of the management board (executive directors) and of the supervisory board (non-executive directors) at Deutsche Bank from 2007 – that is, before the outbreak of the financial crisis in 2008 – to 2014. For the performance-based remuneration of management board members the study finds that Deutsche Bank already had a system in place in 2007 that supported long-term orientation because the performance measurement horizon and payment horizon were structured in such a way that the award year 2007 actually affected the time span from 2006 to 2011. This feature of the remuneration system has been developed further since then. Moreover, in 2013 Deutsche Bank introduced supplementary non-financial indicators to measure bank performance. Supervisory board remuneration increased markedly during the period of analysis, reflecting the growing importance and workload of supervisory board members. Following the international trend, performance-based remuneration for supervisory board members was discontinued in 2013.

Offene Fragen zum Wertpapiererwerbs- und Übernahmegesetz

Dieser Beitrag soll das Wertpapiererwerbs- und Ubernahmegesetz (WpUG) aus oko-nomischer Sicht vorstellen und offene Fragen erortern.1 Bei allen Ubernahmeregelungen geht es im Kern darum, das Aktien in Streubesitz in einem geordneten Verfahren und zu einem angemessenen Kurs auf einen Bieter ubertragen werden. Also organisiert das WpUG einen Markt fur die Konzentration von Streubesitz. Dazu gehort, das der Bieter die Konditionen seines Gebots veroffentlichen mus, sie nur unter bestimmten Bedingungen verandern darf, das der Vorstand der Zielgesellschaft dazu Stellung nimmt und das die Aktionare ihre Annahme des Gebots ruckgangig machen konnen, wenn ein zweiter Bieter auftritt. In diesem Beitrag werden die Ziele und Vorschriften des WpUG vorgestellt. Wie nicht anders zu erwarten, ergibt sich aus dem neuen Gesetz eine Reihe ungeklarter Fragen, auf die zum Ende hin eingegangen wird. Dabei werden auch erste Erfahrungen mit dem WpUG berucksichtigt.