Shaping Up the Company’s Internal Investment Fund Through Separation Portfolios

According to political economists, the state’s governance of infrastructure is becoming prone to processes of financialization. To date, however, research on how state owners of infrastructure enable and react to the entry of financial logics into such domains remains limited. This paper mobilizes the case of Eandis, a Flemish energy grid company, as a typical case to examine the causal mechanisms involved when state-owned utilities become subject to financial logics. During the 2000s, Flemish municipalities increased their ownership of Eandis, while the company deepened its debt exposure to optimize return on capital. In 2016, Eandis aimed to attract private financial equity and selected a Chinese investment fund as a potential co-shareholder. Although this buy-in was blocked, the conditions under which the state-owned company became increasingly entangled with financial markets remain unchanged and warrant a deeper examination. To explain this trajectory, we identify two causal mechanisms in the fields of market-making and ownership strategies by the multiscalar state. First, we show how regulatory models caused Eandis to focus on financial metrics such as credit ratings, subjecting management to financial market disciplines. Second, we find that budgetary constraints, combined with top-down utility governance, have made municipalities dependent on financial returns on utilities. The interaction between market-making and financial ownership strategies institutionalizes a financialized gridlock, in which municipal shareholders’ interests conflict with the need for low consumer fees and green grid investment. We argue that reforming the regulatory framework and strengthening fiscal solidarity across state layers would allow states to develop non-financialized strategies.

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Household Wealth: Low-Yielding and Poorly Structured?

Journal of Risk and Financial Management ◽

10.3390/jrfm14030099 ◽

2021 ◽

Vol 14 (3) ◽

pp. 99

Author(s):

Marc Peter Radke ◽

Manuel Rupprecht

Keyword(s):

Household Wealth ◽

Financial Advisors ◽

Investment Fund ◽

Data Set ◽

Public And Private ◽

Consistent Manner ◽

Widespread Belief ◽

International Comparative ◽

Real Returns ◽

Mean Variance

In this paper, we present a newly generated data set on real returns of households’ aggregated asset holdings, which adds additional and more sophisticated information to existing relevant datasets in the literature. To do this, we draw on various datasets from public and private sources and then transform and combine them in a consistent manner that allows for international comparative and intertemporal analyses. Based on this, we address two current debates on the development of household wealth in the euro area that have been triggered by the low-interest environment. The first debate refers to the development of real yields on household wealth from 2000 to 2018, whereas the second debate deals with the mean-variance efficiency of household portfolios. Contrary to widespread belief, we find that yields on total wealth, which were largely dominated by non-financial assets’ yields, were mostly positive, although they exhibit a declining trend. Moreover, on average, overall real yields were significantly lower after 2008. Referring to portfolio efficiency, we find that current portfolios seem to be comparatively close to mean-variance efficiency. If households were to optimize their portfolios despite limited room for improvement, holdings of equity and investment fund shares should be reduced, contradicting common recommendations of financial advisors.

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Market Liberalization, Regulatory Uncertainty, and Firm Investment

German Economic Review ◽

10.1111/j.1468-0475.2012.00564.x ◽

2012 ◽

Vol 13 (3) ◽

pp. 352-361 ◽

Cited By ~ 1

Author(s):

Florian Baumann ◽

Tim Friehe

Keyword(s):

Market Entry ◽

Market Liberalization ◽

Firm Investment ◽

Labor Costs ◽

Regulatory Uncertainty ◽

Internal Investment ◽

The Impact

AbstractThis paper analyzes the effects of regulatory uncertainty regarding labor costs on investment in a liberalized market. We distinguish between the external investment margin (market entry) and the internal investment margin (technology), and establish that regulatory uncertainty affects these margins differently, encouraging market entry, but discouraging technological investment. As a consequence, the impact of regulatory uncertainty on competition in liberalized markets is a combination of these two countervailing forces.

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The CCM model: a stock valuation tool for a student managed investment fund

Managerial Finance ◽

10.1108/03074351211248225 ◽

2012 ◽

Vol 38 (9) ◽

pp. 892-911 ◽

Cited By ~ 7

Author(s):

Jared H. Bowers ◽

Angeline M. Lavin

Keyword(s):

Investment Fund ◽

Stock Valuation

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