Please see below selected intelligence from 2016 and earlier about investment. This is a synthesis of major recent developments at corporates, business schools, thinktanks, media, commentators, and other key influencers.
- The world’s listed companies have paid out more than half their profits to shareholders in the form of dividends over the past year, an unusual situation that tends to occur only in periods of widespread economic weakness. In two years the proportion of profits paid out as dividends by companies within the MSCI World index has risen from 43 per cent to 51 per cent, according to Citi, above the long-run median of 46%.
- The forces that have driven exceptional investment returns over the past 30 years are weakening, and even reversing, warned McKinsey. It may be time for investors to lower their expectations. Given the waves of turbulence that have swept through financial markets in recent years, including the 2000 dot-com meltdown and the 2008 financial crisis, it may sound odd to describe the past three decades as a golden age for investors. But the reality is that total returns on equities and bonds in the United States and Western Europe from 1985 to 2014 were significantly higher than the long-term average.
Please see below selected pre-2016 intelligence about corporate growth.
- Mergers hit a record high in 2015, with healthcare and technology firms leading a global spending spree that hit $4.86 trillion. That is bigger than the previous record of $4.81 trillion in 2007, immediately before the financial crisis struck. The increase was driven by mega-mergers – there were 67 deals worth $10bn or more each, totalling $1.9 trillion, more than double the value seen in 2014.
- Buyout investors in Europe took advantage of high stock market valuations and a surge in corporate M&A to sell or list companies at a record pace in 2015, according to new data. Private equity groups exited €153bn of deals over the year, a third more than in 2014 and eclipsing the pre-crisis boom years of 2006 and 2007, the figures compiled by the Centre for Management Buy-out Research for the buyout firm Equistone show.
- EY developed its '7 Drivers of Growth' to help companies align their capabilities with their growth strategy to accelerate their growth. This framework is the product of extensive research which examined the growth journeys of hundreds of companies around the globe – ranging from start-ups to leading businesses – as well as in-depth interviews with winners of its Entrepreneur Of The Year™ programme. EY's findings pointed to a stark need to move the conversation about growth and customer value beyond the traditional focus on people, systems and processes. By focusing on a broader set of capabilities, companies can accelerate growth and make it sustainable.
- Global M&A volume in November 2015 totalled a monthly record high of US$606.6bn, up 7% on the previous monthly record of $567.1bn set in October 2015. M&A activity in November 2015, however, totalled 2,657 deals, the lowest monthly level since June 2005 (2,647 deals). Pfizer’s proposed $160bn merger with Allergan is the second biggest M&A transaction on record, behind Vodafone AirTouch’s $172.0bn acquisition of Mannesmann in 1999 . November 2015 global M&A volume was led by US targeted acquisitions totalling $390.9bn (64% market share), up 61% from October 2015 ($242.9bn), and the highest monthly volume for US targeted M&A on record.
- Europe targeted M&A volume has reached US$1.03trillion in 2015 YTD, up 17% on the $883.8bn announced in 2014 YTD and the highest YTD level since 2008 ($1.29tr). Similarly, global M&A has increased 37% year-on-year to $4.68tr in 2015 YTD, surpassing the 2007 full year record volume of $4.61tr. The increase was driven by 171 $1bn+ deals with a total of $699.4bn so far this year, up 8% on 2014 YTD ($560.6bn). Deals valued over $10bn also increased to $301.2bn via 9 deals in 2015 YTD, compared to 10 transactions worth $167.6bn in 2014 YTD.
- In the EMEA Mid-Market through November 30th, PwC and KPMG advised on 240 deals and 232, respectively. Rothschild with 208 deals, represented the largest aggregate deal value - US$11.5bn. In the United Kingdom and Ireland, PwC was the leading advisor in both the Financial Mid Market League Tables up to US$500m and up to US$200m, having advised on a total of 90 deals, valued at US$4.1 billion.
- Grow from Your Strengths from Strategy& revealed four powerful approaches to unlocking growth that lasts. Its underlying tenet: You can grow profitably and sustainably only from a position of strength. Accomplishing this requires best-in-world capabilities - organisational strengths that truly differentiate you from the rest of the pack. Leveraging those strengths and developing new ones that boost your chosen way to play is the key to driving growth that lasts.
Please see below selected recent intelligence about corporate growth.
- About 100 senior executives from 20 countries, representing a wide range of industries, convened for BCG's seventh European Strategy Leadership Summit. This year, with companies facing the twin challenges of an uncertain global economic environment and continuing digital disruption, the theme of the gathering was "Innovating for Growth: From Emerging to Mature Markets." The sense that emerged was that while growth is now harder to achieve, it’s not impossible. Finding good growth just requires thoughtfulness, more innovative approaches, and discipline.