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Pension funds wary of UK government’s call to fund post-Covid recovery

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Pension Industry Updates

UK pension fund administrators balk at government efforts to encourage them to spend billions on the country’s economic recovery, warning of potential conflicts of interest for their savers.

In an unprecedented intervention last week, Prime Minister Boris Johnson and Chancellor Rishi Sunak issued a letter to the industry, urging it to invest more money in sectors such as infrastructure, to help the nation to “rebuild better” in a “big bang of investment” after the Covid-19 pandemic.

But UK pension funds, which have more than £ 1 billion in assets, are generally wary of investments in private markets such as infrastructure and venture capital, fearing high fees that can erode returns on companies. pensions and poor liquidity that can impact the timing of pension payments.

“Suggestions that directors should foster opportunities in the UK to help us ‘build back better’ are not in my opinion,” said Andrew Warwick-Thompson, director of Capital Cranfield, the firm of professional directors , and former senior executive of The Pensions Regulator. “UK illiquids will have to go through the same due diligence process as any other investment decision.”

Scottish Widows, one of the UK’s leading pension providers, supports broader investment in infrastructure to help the country’s recovery, but said any framework to push pension assets in that direction should offer a level risk-adjusted return at least as good as those available elsewhere.

“Those who manage retirement assets on behalf of savers have a duty to achieve the best possible returns for clients,” said Pete Glancy, policy manager at Scottish Widows. “It is a circle that the government will have to crisscross. “

Sir John Kay, the economist who led the 2012 independent review on UK stock market reform measures, said the government needed more details on infrastructure projects that could attract investment from the regimes of retirement.

“There is already long-term financing available for investments in infrastructure such as toll roads and airports, but this is really a refinancing of existing assets,” Kay said.

“It is not certain that pension schemes provide the answer to the financing needs of new national projects, such as [rail project] HS2 and the Hinkley Point nuclear power plant. These are terrible financial investments for individual retirement savers and such projects are only really attractive to large institutional investors as the government and consumers will have to put in a lot of money to subsidize them. “

Johnson announced plans to hold an investment summit in Downing Street in October, to consolidate efforts to boost institutional investment in so-called productive finance, such as infrastructure.

Private market leaders welcomed the move. The British Private Equity & Venture Capital Association said the speech by the Prime Minister and Chancellor was “excellent news” for British retirees.

“Industry is the driving force behind many essential innovations in the UK, creating enormous economic and social value for our country in the form of jobs, growth and leading products and services,” said Michael Moore , Managing Director of BVCA. .

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British pension funds urged to support investment ‘big bang’

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Pension Industry Updates

Boris Johnson called on British pension funds to invest more money from retirement savers in British assets to trigger an “investment big bang” to support economic recovery.

In a letter to the investment industry, Prime Minister and Chancellor Rishi Sunak said UK institutional investors need to ‘seize the moment’ and use their ‘hundreds of billions of pounds’ to support assets that often have a longer term return on investment, such as infrastructure, which includes bridges, roads and wind farms.

They argue that UK assets are overlooked by domestic investors. “UK institutional investors are under-represented in UK asset ownership,” the letter reads. “More than 80 per cent of UK defined contribution pension fund investments are primarily listed securities, which only represent 20 per cent of UK assets.”

Some of the world’s largest pension funds, including Canada and Australia, have actively supported infrastructure projects, notably in the UK, which officials say have provided long-term income for their investors. .

Ministers also want millions of savers to be better able to support high-growth UK tech companies, which often lack institutional investment due to the nervousness of fund managers to back riskier, loss-making start-ups .

Pension fund trustees have a duty to act in the best interests of their members with the higher fees and charges associated with non-standard investments, such as infrastructure and private equity, seen as a barrier to flow. liquidity to these sectors.

To address this, the government this year relaxed a 0.75% cap protecting millions of savers in defined contribution pension plans from high fees, so that trustees can invest in areas such as private equity. investment, where high performance fees are common.

The Financial Conduct Authority is also helping set up the Long Term Assets Fund, an investment vehicle designed to stimulate pension plans’ cash investment in illiquid and long term assets. This has been supported by the Productive Finance Task Force, chaired by City Minister John Glen, which is examining barriers to investing in such assets.

The letter says the government is doing “everything possible – unless it requires more investment in these areas as some have advocated – to encourage a change in mentality and behavior among institutional investors.”

“The government remains open to removing other barriers when they are identified,” he adds.

Dom Hallas, executive director of the Coadec technology group of companies, said investing in pension funds was “the next big step for the UK start-up ecosystem. . . the sooner we can move from discussion to capital allocation, the better.

The Pensions and Lifetime Savings Association, which represents pension schemes with 30 million savers and more than £ 1.3 billion in assets, said it supports the government’s ambition to ensure that funds pension have the opportunity to invest in the widest range of assets.

“It is also welcome to see [them] recognize that there is no one ‘right answer’ when it comes to how much pension fund managers should invest in UK assets over the long term, ”said Richard Butcher, chairman of the PLSA.

The government’s efforts to encourage administrators to allocate more pension funds to help the country’s economic recovery have raised concerns in some areas of the industry.

Andrew Warwick-Thompson, former executive director of The Pensions Regulator for regulatory policy, in May accused the government of “bowing” to asset managers with its reforms to the workplace pension expense cap, which , he said, would increase the costs of millions of retirement savers in the workplace.

Roger Barker, director of policy at the Institute of Directors, also said there was a lack of detail on how the government will meet its goals.

“The business models of many UK institutional investors are heavily biased towards achieving short-term financial performance. It is unclear how the changes suggested by the government in this letter will fundamentally realign their approach to the longer term. “

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San Jose pension funds post record returns

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The city of San Jose’s retirement system posted its highest returns in decades thanks to a timely rebalancing amid the coronavirus pandemic.

The pension fund, which is split in two, brought in 29.46% for its pension system for employees of federated cities and 26.49% for its police and firefighter pension plan, according to its investment manager, Prabhu Palani.

Palani joined the city’s pension funds as CIO in 2018, having spent the first part of his career in portfolio management. Since then, the plan has gone from the 99th percentile of performance relative to its peers to the top quartile, Palani said.

In 2020, the fund had about a quarter of its assets allocated to fixed income securities.

“I thought assets at all levels were expensive,” Palani said. Institutional investor. “I thought maybe there was a recession coming.”

Although he said he could not have predicted a pandemic, it turned out that the decision was fortuitous. In March 2020, the markets collapsed. “We had the fastest bear market in history,” Palani said. “This one lasted all 12 trading days.”

As the market fell about 35%, Palani’s team decided it was time to redeploy capital into growth assets.

“We weren’t sure if we were going to time the bottom perfectly,” said Palani. “Personally, I thought they would go down even more.”

The San Jose investment team classifies assets into three categories. Growth, to which the fund moved in March 2020, includes public and private equities, other private asset classes, high yield credit and emerging market bonds.

The other two categories are a low beta compartment, which contains short-term fixed income and absolute return strategies, and an inflation protection category, which contains TIPS and commodities.

Earlier in 2021, San Jose revisited these allocation strategies. Amid broader market concerns about rising inflation, funds made the decision to allocate a small portion to commodities.

“It hasn’t manifested itself in asset prices yet,” Palani said of rising inflation. “You’ve certainly seen other prices go up. If you look at the bond markets, they always indicate it’s transient. The problem is unanticipated inflation, and it is something we are hedging against.

Palani attributes his team to one of the sources of the fund’s outperformance. Since joining us in 2018, Palani has expanded the investment team, bringing in members with experience in portfolio management.

“When we talk to a manager, we know exactly what they’re thinking, and you can’t put a price on that,” Palani said. “We are very sympathetic to the managers, but we are also very skeptical. ”

The board also played a role, Palani said. San Jose requires that some of its board members have experience in the investment industry. Palani said the team was lucky in that regard: three board members are venture capitalists, which is a boon for Palani’s burgeoning venture capital program.

The investment team also has more freedom compared to some of its peers. The pension system is independent from the city, and the team itself has an investment delegation.

Going forward, Palani has a keen eye on inflation and the Delta variant of Covid-19, and, perhaps most importantly, is looking for yield. “I get paid to worry,” he joked, adding that there are few asset classes that can overcome the return hurdles necessary for a public pension fund to be successful.

“The past has been great, but have we borrowed from the future in terms of performance? Said Palani. “And how often can you get a 30% year?” ”

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College majors with the biggest gender disparities | Personal finance

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Gender disparities persist in college majors and then spill over into careers, whether in computer science and electrical engineering, or nursing and teaching. Some progress has been made in encouraging more women to enter male-dominated fields and close the pay gap. Computer programming is an example where the pay gap has narrowed since 2016. But in other cases, inequalities persist: 50% of women quit tech jobs by the age of 35.

Conversely, women continue to dominate in careers such as nursing or teaching, but often men in these fields earn more than women. Women in government positions in public health earn $ 3,000 less than men in the same positions, or men in special education jobs earn $ 2,400 for women.

StudySoup compiled data from the National Center for Education Statistics to identify the 15 college majors with the greatest gender disparities. Data is submitted by all U.S. colleges participating in the Federal Title IV Financial Aid Program, 2017-2018 being the most recent year available. StudySoup removed majors under 5,000 students, leaving just over 1,000 disciplines in the dataset.

StudySoup recognizes data collected on gender through a binary lens, which does not accurately represent all gender identities. A recent study estimates that approximately 1.2 million adults in the United States identify as non-binary, an unexplored population in the dataset collected.

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Foster Garvey Continues to Grow in Business and Corporate Finance with the Addition of Jason M. Powell as Director

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PORTLAND, Ore., August 3, 2021 / PRNewswire / – Foster Garvey, PC further expanded its Business & Corporate Finance practice group with the addition of Jason M. Powell as director in the cabinet Portland Office. Powell is the company’s third strategic hire in the past four months with future growth on the horizon.

With extensive experience in advising companies, lenders, investors and startups across United States, Powell is a seasoned corporate, securities and mergers and acquisitions lawyer. Powell is focused on results, delivering exceptional customer service in line with Foster Garvey’s commitment to best-in-class lawyers. His practice is focused on assisting clients with securities offerings and other financing transactions, mergers and acquisitions and joint ventures. As the business grows, Powell is often called upon to advise start-ups and emerging businesses on a wide range of issues throughout the business lifecycle.

“Jason brings to our team considerable complementary experience and exceptional knowledge, adding to the depth of corporate and business advice we can provide to our clients,” said Hillary Hugues, director and leader of the Business & Corporate Finance practice group. “We are delighted to welcome him as we continue to align top legal talent with the growth of our firm.”

Powell was most recently a partner at Dunn Carney LLP, where he was co-lead of the securities law team and a member of the Business & Corporate practice. During his tenure, he advised clients on a variety of business combination transactions, equity financings, real estate syndications, real estate funds, mortgage pools and productive and non-performing note pools. He is himself a real estate investor, author, speaker and educator having written two books on private lenders. Currently, Powell is working on an eBook on real estate syndication. He graduated from the University of Montana Alexander Blewett III Faculty of Law. In addition, Powell holds certificates in Venture Finance from VC University Online (University of California, Berkeley) and in Commercial Real Estate of Cornell University.

“Continue our growth here by Portland is a key pillar of our commitment to innovative and exceptional customer service, ”said Joseph Arellano, from Portland Office general manager. “All of us at Foster Garvey are delighted to have Jason on board and look forward to his many contributions and successes. ”

Foster Garvey PC, a Pacific Northwest-based law firm with offices on both coasts, offers extensive national and international reach to serve many influential and innovative companies, government entities and individuals across a full range of legal services. The firm’s lawyers are consistently recognized for their in-depth industry knowledge and superior customer service by leading legal industry publications, including Best avocados in America©, Bedrooms United States and US News-Best Lawyers “Best Law Firms”. In addition to providing effective and efficient advice, Foster Garvey maintains a strong commitment to community service, volunteer representation, diversity and inclusion efforts, and a collegial and equitable work environment. Seattle, Portland, Washington DC, new York, Spokane and Beijing.

Contact: Paul Matulac
Foster Garvey, PC
(503) 553-3136
[email protected]

THE SOURCE Foster Garvey, PC

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Public finances and the good life

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The sole purpose of government, since Aristotle and Kautilya, is to ensure the peace, security and well-being of the citizens. Ancient Greek Athenianthat’s what we call Eudaimonia or “flourishing”. Entire nations and civilizations rose and fell on the foundation upon which their public finances were built. If it is based on prudence, discipline and parsimonious responsibility, the company will flourish. If, on the other hand, they are inspired by madness and gratuitous debauchery, sooner or later they will collapse.

The Ministry of Finance, Planning and Budget recently released details of the Medium Term Expenditure Framework and Budget Strategy Paper for 2022 to 2024. The document projects staggering spending of N14.6 trillion on the service of the debt during the period – N3. 6,000 billion in 2022; 4.9 trillion naira in 2023; and 6.1 trillion naira in 2024.

The minister revealed that in 2022, the government is forecasting a revenue stream of 6.54 trillion naira to be paid into the Federation account and an additional 2.62 trillion naira in VAT, bringing the total revenue. expected for the coming year at 10.16 trillion naira. The budget deficit is expected to be 5.62 trillion naira, which is a marginal increase from the figure of 5.60 trillion naira in 2021. By 2023, total revenue is expected to reach 13.98 naira.

The key macroeconomic assumptions are based on a benchmark crude oil price of $ 57 per barrel for 2022, a production level of 1.88 million barrels per day, and an exchange rate of N410 to the US dollar, a inflation rate of 10% and nominal GDP of 149,369 billion naira. I find some of them to be quite optimistic. We have never reached single-digit targets for inflation since 2015. It is highly unlikely that we will be able to reduce it to the 10% forecast during an election campaign in 2022. The recent decision to move currency sales BDCs to commercial banks led to a marginal decline of the naira against the dollar. With all the geopolitical tensions and uncertainties, I don’t see the naira stabilizing anytime soon.

Times are not easy for the leaders of an economy like ours. Inflation and unemployment are spiraling out of control, in a context of slow growth, geopolitical tensions and widespread insecurity. Economists describe our current economy as “stagflation”. Two American academics, Robert Rotberg and John Campbell, referred to our country as a “failed state” in an article they recently wrote in the iinfluential newspaperal, Foreign Affairs. In line with our opening remarks, the international rating agency Fitch recently issued a forecast that by the end of 2022 we will need over 300% of our income to service our debt. .

To better appreciate the challenges we face, a trend analysis is useful. As of March 31, Nigeria’s total debt stock stood at 33.107 trillion naira (US $ 87.239 billion in dollars). The external component of the total stock of national debt stood at $ 32.86 billion (N12.4 trillion). Nigeria’s current debt-to-GDP ratio is estimated at 31.94 percent. It almost doubled from a low of 17.4% in 2014. And right now, the National Assembly has approved a new wave of borrowing worth billions of dollars more. You and I know that you are not using GDP to pay off your debt; you use government revenues to pay off your debts. In 2014, before the current CPA-led regime came to power, the former Goodluck Jonathan administration paid 500 billion naira in debt service. This represented only 10% of total government revenue. We were in a relatively comfortable position. The following year, 2015, coinciding with a global recession and a precipitous drop in global oil prices, the debt repayment bill tripled to 1.5 billion naira, amounting to 30% of government revenue. . In 2017, the figure galloped to N3tn, which amounted to 61.6% of government revenue. In 2020, the government achieved a total of 3.25 billion naira in revenue while spending 2.34 billion naira on debt service. This represented 72% of the revenue allocated to servicing our loans for that year. It is interesting to note that in the same year the government spent only 1.7 billion naira on capital expenditure.

A recent budget implementation report says the federal government spent 1.8 billion naira on debt servicing in the first five months of this year alone, accounting for 98% of total income earned during this period. From January to May, the government generated a total of 1.84 billion naira in total revenue, a significant shortfall from the projected figure of 3.32 billion naira. This obviously indicates that if the same trend were repeated for the rest of the year, we would be spending 98% of all income on debt service.

Interestingly, the 2021 budget allocation for capital spending stands at 3.4 billion naira, or 29% of the total annual budget. A situation where debt service obligations exceed the allocation of capital expenditure would be of particular concern. All of the above suggests that there is an accelerating trend in increasing both the amount of debt and the percentage of income spent on servicing our repayment obligations. Judging by the laws of statistical probability, the change in the percentage of receipts on debt service is expected to increase very significantly over the coming year.

As difficult as the economic conditions are, we have a few options. The late John Magufuli, former President of Tanzania, decided to reduce the level of borrowing to the bare minimum, with extraordinary results. The Chinese had offered him a loan of 10 billion dollars. When he saw that in the fine print they wanted to secure the port of Dar es Salaam for 99 years, he declined the offer. Rather, it focused on increasing national income, drastically reducing overseas travel, and rigorous implementation of infrastructure projects. The results have been outstanding. Tanzania enjoyed one of the fastest growth rates in the world without going through the frenzy of external borrowing.

We Nigerians have a lot to learn from this. As far as I’m concerned, if we have to borrow, let it be strictly for projects with guaranteed returns on investments. We should also reduce the cost of government while closing some of the loopholes that are sapping our foreign currencies. We can run government while living within our means. We also need to control the cost of governance. The government should also engage with our creditors to restructure our loans to ensure the fiscal space that will allow us to continue to grow while expanding the boundaries of collective welfare possibilities.

The worst a government can do under our circumstances is to succumb to the penchant for increasing taxes and tariffs. It would amount to folly consumed in a time of economic stagnation. There is the phenomenon of the Laffer curve, associated with the American economist Arthur Laffer. It shows that there is an optimal level where the government can impose taxes. When you exceed this optimal level, you will actually experience a disproportionate decline in tax revenue. This is more likely to be the case during a recession. The great economist, John Maynard Keynes, taught that in times of economic lows, managers of the economy should ensure that more money is placed in the hands of households, businesses and businesses in order to stimulate the economy. aggregate demand. Therefore, widening the tax net is the way to go. Many countries collect taxes through lifestyle audits. When a man keeps a dozen exotic cars in his mansion garage and rents private jets for his trips, authorities have a duty to do a lifestyle audit to make sure his tax payments reflect his high lifestyle.

I would also like to insist on a more rigorous accountability system for revenue generating agencies – customs, federal tax service, Nigeria National Petroleum Corporation and others. We hear bloody stories of billions of billions withheld, sometimes from private bank accounts.

Boosting income in our situation would also require securing a healthy macroeconomic environment and an attractive business ecosystem for businesses to thrive. The current cost of running the government is far too high. There are many loopholes and loopholes that facilitate financial leakage and bleeding. These must be rigorously plugged.

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Pixelligent adds Wayne Rehberger, corporate finance expert, to its advisory board

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BALTIMORE, Maryland, July 28, 2021 (GLOBE NEWSWIRE) – Pixeligente Technologies today appointed Wayne Rehberger to its advisory board. Expert in corporate finance, Rehberger joins Pixelligent expands its Designer Compounds ™ portfolio, deepens its commitments with major customers in the consumer electronics market and extends its distribution footprint.

Rehberger has built world-class financial organizations for public and private companies in various industries. An insightful strategist with extensive expertise in corporate finance, governance and oversight, he has guided global organizations through major change events with strategies to create profitable growth. As CFO and COO of XO Communications, he led a restructuring which culminated in an acquisition by Icahn Enterprises in 2002 and the subsequent purchase of Allegiance Telecom. As SVP & CFO in the professional services industry, he has managed complex mergers & acquisitions including the acquisition of Engility in 2019 by SAIC and the previous merger of Engility with TASC in 2015. In 2017, he was named Virginia CFO of the Year by Virginia Business.

“Wayne’s talent is ‘creating value’,” said Craig Bandes, CEO of Pixelligent. “With an exceptional background in corporate finance, as well as a keen mind in operations and business development, he has helped high-growth companies grow and create meaningful value for stakeholders. His expertise will be invaluable as we move to volume production on a global scale and position ourselves Pixelligent for rapid and profitable growth in our served markets. We are honored to welcome her on board. “

Rehberger praised the Pixelligent team for their relentless innovation and focused execution, noting: “The technology is in a class of its own and attracts big name customers; the leadership is competent and motivated; market opportunities are vast and mass production is on the verge of With this foundation in place, Pixelligent technologies will play a key role in delivering the next generation of extended reality products, OLED displays / Solid State, optical sensors, etc.

Rehberger began his career with KPMG after a decade of service in the United States Army and the Army Reserve. He holds a BS from Bucknell University and an MBA from the Moore School at the University of South Carolina.

He serves on the boards of directors of QTS Realty Trust (NYSE: QTS), Fusion Connect and Abt Associates, as well as the advisory board of SAP National Security Services, a subsidiary of SAP (NYSE: SAP).

About Pixelligent
By synthetically replicating the metal oxides that nature has perfected, Pixelligent has reinvented the way composite materials are made, dramatically improving the efficiency and durability of consumer electronics and clean energy applications. Our PixClear® Designer Compounds ™ offer a unique combination of properties, operating efficiency and performance for augmented and mixed reality, OLED / QD / LED displays, optical sensors, solid-state lighting and applications related to clean energy. Our PixClearProcess® development and manufacturing platform enables us to design materials that integrate seamlessly into most common manufacturing processes including inkjet, nanoprint, spin coating, dispensing , slit matrix and photolithography. Our PixClearProcess® uses a fraction of the footprint required by traditional chemical companies, and our efficiency-enhancing PixClear® materials can provide terawatts of energy savings in solid-state display and lighting applications. . Please visit us at and follow us on LinkedIn and Twitter @Pixelligent.

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How Corporate Finance Executives Use Excel Templates to Make Their Life Easier

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Excel is at the heart of every financial function performed by a business. As part of the Office 365 suite, Excel is used by more than a million businesses worldwide, 731,000 of which in the United States alone depend on it. It’s a versatile and easy-to-use app, and companies are showing no signs of wanting to give it up.

Despite its predominant use, there are limits to the functions of Excel. One of its most notorious limitations is the relative lack of flexibility it offers. When creating a new template, for example, users need to start from scratch by filling the worksheet with data and creating a workbook.

Excel templates provide a shortcut when performing these tasks. Here are some of the most important ways corporate finance professionals use them to launch their models and complete tasks.

Model specific scenarios

What-if analysis is a central part of a company’s financial planning. The financial implications of various hypothetical scenarios shed light on everything from budgeting to cost projections, to cash flow models. Typically, model inputs are adjusted and their results evaluated by financial analysts.

Excel templates for finance include business budget templates that extend up to one year. In addition, business financial analysts also use financial projection spreadsheets which are used to record and track major financial decisions.

For example, a company’s salary costs can be entered into these spreadsheets and edited to show the impact on cash flow at the end of the quarter or year. Thanks to the spreadsheet with pre-filled formulas, viewing the impact of changing variables is simple.

As a result, analysts spend less time entering formulas and more time performing value-added tasks such as modeling variables and projecting financial scenarios.

Create monthly financial views

Monthly closures are a headache just about all businesses, thanks to their hectic nature. No matter how far in advance finance employees collect data, that data always changes and needs to be validated multiple times before it goes to the CFO.

Given the urgent and time-limited nature of this process, it makes sense for departments to use pre-populated templates that require employees to simply enter data. The results of this data can be used to provide a quick overview of financial performance.

Once this data has been exported to consolidated monthly closing models, it can be automatically integrated with numbers from other departments. Therefore, finance employees save time by not defining relationships between cell values ​​every time data enters the consolidated worksheet.

These monthly views can be quickly exported as reports to the CFO for provide instant snapshot of how the company fared. In addition to monthly views, these templates can be modified to accommodate quarterly and semi-annual views, all of which can be consolidated to prepare annual financial statements.

Create easy-to-understand reports

Financial reporting is an important process that must go through intensive audit checks at every stage. Often times, changing the value of a cell in a worksheet is more than just deleting a value and entering something else. Teams should document the rationale for changing these values.

Templates make it easy to document changes with preformatted spreadsheets. Most importantly, they help standardize reporting procedures. When standardized and centralized models are not used, each department follows its own reporting process, making consolidation and reporting across the enterprise all the more difficult.

In these cases, teams have to integrate different formats into a single spreadsheet, which introduces the possibility of errors. Templates dramatically reduce errors because data entry tasks are made that much easier. While some models can be complicated, even these require a user to simply enter data and document the results present on the spreadsheet.

Thus, the reports created with this data are more reliable and consistent. When presenting numbers to senior management, finance teams can easily create new reports as they don’t need to create a format from scratch.

Focus on opportunity analysis

Each company performs a detailed scenario analysis regarding capital allocation. Should they invest in improving an existing product line or should they devote more capital to hiring new employees? These decisions don’t have easy answers, and finance teams spend a lot of time analyzing data.

Given how critical these decisions are, it’s unthinkable that an employee would spend their time creating a new spreadsheet from scratch. Instead, it’s much more efficient to use pre-populated ROI analysis templates and cost-benefit analysis spreadsheets. Once the formulas and formats are loaded and ready to use, all that remains is to enter their projections.

The result is that employees spend more time on actual analysis rather than office work. With this focus on opportunity, companies can make better capital allocation decisions.

Simplify corporate finance

Excel templates help corporate finance employees avoid paperwork and add value to their organizations. While they don’t eliminate the manual labor associated with financial modeling, they certainly shorten the process and help businesses make better financial decisions.

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Hot Topics from ASIC’s Latest Corporate Finance Update | Jones Day

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In short

The situation: The Australian Securities and Investments Commission (“ASIC”) recently released its quarterly update on corporate finance. Hot topics include Special Purpose Acquisition Companies (“SPAC”), electronic delivery of takeover documents and the importance of independent expert reports to shareholder approved transactions.

The result: PSPCs remain ineligible for listing on ASX, which means major legislative changes will be needed before PSPCs can come to Australia. ASIC is also reporting an increase in back-up requests allowing the electronic submission of Chapter 6 takeover documents, which is a welcome development for practitioners. In addition, ASIC has provided advice on when independent expert reports may be required for shareholder approved transactions.

Looking forward: SPACs will likely remain in the sights of major financial regulators around the world, while their financial merits attract a range of views as well. The use of electronic communication methods in Chapter 6 takeovers is likely to become more widespread, especially with the rebound in takeover activity lately, and we believe the market would be favorable to an order of class or other more permanent regulatory solution to facilitate electronic communication.

PSPCs: Are They Coming to Australia?

Almost daily, the financial and mainstream press reports on PSPCs, with differing views and scenarios. Interestingly though, with their popularity growing rapidly in the United States in particular, increased regulatory oversight and a broader business question as to whether there are enough merger targets for SPACs means we seem almost be at an inflection point on the SAVS.

These newly formed companies (without assets or operations) which raise capital through an initial public offering, are not able to register on the ASX due to the restrictions of the registration rules. on “cash” entities and ASX requirements on structural and operational requirements for a listed entity. So, in this regard, the American-style model cannot be easily “lifted” and transplanted to Australia without significant changes to our laws and operational market issues.

ASIC says it continues to monitor global regulatory developments, including in the US, UK and Singapore – and in that context, it noted that increased regulatory scrutiny by the SEC American might have been a factor that contributed to a cooling in the PSPC market.

Despite the real regulatory challenges, here in Australia we continue to respond to requests from Australian targets, potential investors and business advisers on the different ways to play in the PSPC market. Our American colleagues have seen a significant pause in new PSPC IPOs in part because of increased regulatory scrutiny. That said, they observe that a significant amount of capital is available as the SPACs that went public at the end of 2020 and early 2021 continue to seek new targets. In the US, we continue to monitor a rebound in the SPAC market, potentially with a more stringent regulatory framework or otherwise strengthened investor protections.

Use of electronic communication methods in acquisitions

Electronic sending of takeover documents

Although there is an established practice in arrangement drawings to send the scheme booklets electronically (via emailing a hyperlink to a website where the scheme booklet can be viewed) to targeting shareholders who provided an email address to the scheme company (with permission to use dispatch forming part of the court order at the first court hearing), the Companies Act provides that Documents relating to a Chapter 6 takeover (declarations of bidders and targets) are physically sent to shareholders.

In satisfactory development – and consistent with other regulatory initiatives aimed at making it easier to do business in light of COVID-19-related disruptions – ASIC has been receptive to requests for relief to allow parties to send documents take control electronically to shareholders. Our own experience with ASIC on this issue is that they have reacted quickly to these requests, especially when genuine disruption can be demonstrated (for example, locking borders in a particular state can have a big impact on timelines. ).

When parties to a takeover request this exemption, ASIC reminds the parties that the purpose of this exemption is to facilitate electronic access to documents instead of hard copy. In this regard, the form of electronic communications should not be viewed as a way to repackage or summarize information (for example, how to accept or reject, or the pros and cons) relating to the takeover bid. Electronic communication to members should be limited to instructions to shareholders on how to access electronic documents (the common approach is to establish a “transaction specific” website).

Electronic acceptance of takeover bids

Separately, but keeping the electronic theme, we’ve also seen a few examples of electronic (website-based) acceptance of buyout offers. Although online fundraising and also online voting forms for arrangement schemes have been in use for some time, it appears that the trend towards online acceptance of take-over bids is also growing, given the real time-saving benefits it provides.

Provision of independent expert reports for acquisitions approved by members

Independent expert reports again receive a mention from ASIC, although this time around the focus is on when IERs should be provided.

  • “Fair and reasonable” report of defective administrators replaced by an IER: While the practice of directors providing their own “fair and reasonable” opinion for the benefit of members is rare, ASIC cited a recent example about which many concerns were raised. These included: questions about the expertise of directors to express an opinion on financial and technical matters, the independence of one of the directors who wrote the report and the use of the industry experience of certain directors in this regard. which concerns technical matters, although these administrators do not have the appropriate technical diplomas. After ASIC’s intervention, the company hired an independent expert to comment on the transaction, which included a specialized technical report.
  • Provision of IERs for the benefit of members: ASIC recalled that, if members are asked to approve the acquisition of a relevant interest (in this context, we assume that ASIC is referring, for example, to a transaction involving an acquiring party > 20% in another or increasing their from a starting point> 20%), then if members do not receive an IER or a detailed report from directors on the transaction, this may be inconsistent with the obligation directors to disclose all important information about how to vote on the resolution. ASIC goes so far as to say that if membership approval is obtained without a report from the IER or the Director, the approval may be invalid.

Three key points to remember

Noting current Australian regulatory restrictions on PSPCs in Australia, ASIC is closely monitoring global regulatory and policy settings relating to PSPCs amid a larger question of whether the PSPC market is cooling or doing just right. a break to breathe.

  • Electronic methods of communication in takeovers appear to be gaining popularity – with examples of electronic submission of bidder and target declarations, and electronic acceptance facilities, which have recently emerged. Real-time benefits in terms of costs and efficiency result from these developments.
  • In cases where directors decide to produce their own report for members (rather than hire an independent expert), these reports are likely to attract real scrutiny, with the technical and independent expertise of the author directors likely to be in the spotlight of ASIC.
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Mergers and acquisitions consultancy PCB Corporate Finance appoints a new Managing Partner

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PCB Corporate Finance, a technology and advisory-led M&A consultancy firm, today announced the appointment of Brett Newland as Managing Partner.

Prior to joining PCB, Brett spent much of his career as Managing Director in Accenture’s corporate development and M&A teams, supporting the company’s largest and most complex transactions. , both on the purchasing and delivery side. His last role at Accenture was as COO of their global security practice, where he ensured the operational efficiency of the company, managed key ecosystem relationships and supported major acquisitions in the global business. . He joined PCB Partners in 2019 as a Partner.

PCB is a mergers & acquisitions consulting firm, rooted in the entrepreneurial culture. She provides buying and selling services, with a focus on disruptive technologies, digital transformation, management consulting and creative marketing services. It was founded in 2018 by entrepreneur Ben Doltis and former LDC Managing Director Tim Farazmand.

In just three years, PCB has grown into an international consulting company that has worked at the highest level in the digital and consulting industries. The company has assembled a global team of 20 people, strengthening its activities in the UK and adding new offices in the US (NYC and Boston), Australia (Sydney) and India (Mumbai). In 2020, the company also expanded its mergers and acquisitions services and now offers a range of corporate finance advisory, growth advisory, fundraising and private equity hedging services.

Since joining the firm, Brett has completed four transactions for consulting clients in the digital transformation market. This includes advice on acquiring a financial services strategy consultancy, a leading AWS consultancy partner, the UK’s leading data consultancy and a 350 FTE cybersecurity consultancy firm – playing Brett’s previous role as COO of the Accenture Security group.

Commenting on his appointment, Brett Newland said: “We are building something very special at PCB Corporate Finance. I am delighted to have the opportunity to lead a great team and help us reach the next stage of our development.

PCB Founder Ben Doltis added: “Time and time again, Brett has shown how valuable he is to the growth of PCB Corporate Finance. We are already working with some of the largest companies in the world and I am sure that with Brett as Managing Partner we will soon be working with many more.

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