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Purpose: Shariah-compliant security tokens can play an important role in developing innovative solutions to resolve voluntary and involuntary financial exclusion in Muslim societies. This paper aims to present features of Shariah-compliant security tokens and supporting ecosystems that can provide additional sources of financing for small and medium enterprises (SMEs) and create alternative investment opportunities for retail investors. Design/methodology/approach: This conceptual paper presents the building blocks of security tokens, their ecosystem and key functions and activities and then examines these features from Islamic perspectives. This is done by reviewing the contemporary literature on cryptoassets and their ecosystems and analysing these in light of Islamic legal and ethical values and principles. Findings: The paper provides a framework of how Shariah-compliant asset- and equity-based security tokens can be used by SMEs to raise funds quickly and efficiently on crypto exchanges. Given the novelty and complexity of the technology involved and the lack of understanding and skills to develop blockchain-based systems among SMEs, this paper suggests developing security tokens and exchanges in a controlled manner under the supervision of a nation's stock markets. Originality/value: Although several studies examine cryptocurrencies from Islamic perspectives, literature on other cryptoassets and their role in financial inclusion is scant. This paper identifies Shariah-compliant asset- and equity-based security tokens and supporting ecosystems that can contribute to the development of digital capital markets where SMEs can raise funds efficiently and retail investors can invest in alternative asset classes. [ABSTRACT FROM AUTHOR]

Accounting and finance are intricately intertwined with the global quest for environmental sustainability by applying accounting and finance tools for carbon reduction initiatives. Clean energy financial investment is one of the many alternative tools through which accounting contributes to carbon reduction. Accordingly, this paper analysed the impact of separate and integrated clean energy investment alternatives on carbon reduction. Data on clean energy financial investment and carbon emission per capita were collected from the International Energy Agency (IEA) and Our World in Data archives, respectively. Data was analysed by using multiple pooled OLS to evaluate the impact of individual clean energy financial investments on carbon reduction and the impact of integrating the various clean energy financial investment alternatives on carbon reduction separately. Findings show that individual clean energy financial investments may not separately offer desired carbon reduction, hence, albeit some negative coefficients, individual clean investments showed no significant impact on carbon reduction. However, furthering the test by pooling all the clean energy financial investment alternatives shows a significant negative effect of clean energy financial investment on carbon reduction at a P-value of 0.05. This shows that an integration of different alternatives of clean energy financial investment may offer an enhanced reduction of carbon emission, which outweighs the effect of relying on a single clean energy investment alternative. The findings offer significant insight for policy makers' future strategies towards a combination of multiple clean energy financial investments. Furthermore, the findings from this paper are a further testament that accounting and finance are connected with the global quest for environmental sustainability through the application of accounting and financial investment tools in conducting clean energy financial investment. [ABSTRACT FROM AUTHOR]

Recently, liquidity issues in financial markets and portfolio asset management have attracted much attention among investors and scholars, fuelling a stream of research devoted to exploring the role of liquidity in investment decisions. In this paper, we aim to investigate the effects of introducing liquidity in portfolio optimization problems. For this purpose, first we consider three volume-based liquidity measures proposed in the literature and we build a new one particularly suited to portfolio optimization. Secondly, we formulate an extended version of the Markowitz portfolio selection problem, named mean–variance–liquidity, wherein the goal is to minimize the portfolio variance subject to the usual constraint on the expected portfolio return and an additional constraint on the portfolio liquidity. Thirdly, we consider a sensitivity analysis, with the aim to assess the trade-offs between liquidity and return, on the one hand, and between liquidity and risk, on the other hand. In the second part of the paper, the portfolio optimization framework is applied to a dataset of US ETFs comprising both standard and alternative, often illiquid, investments. The analysis is carried out with all the liquidity measures considered, allowing us to shed light on the relationships among risk, return and liquidity. Finally, we study the effects of the introduction of a Bitcoin ETF, as an asset with an extremely high expected return and risk. [ABSTRACT FROM AUTHOR]

Copyright of Ekonomika is the property of Society of Economists 'Ekonomika' and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article begins by setting out the rationale for the symposium on alternative finance and governance. New organizational forms of alternative finance provision have grown in importance in recent years, creating opportunities to challenge and extend existing models of corporate governance, which have been focused mainly on large, publicly traded corporations. The article then summarizes the papers in the symposium that relate to crowdfunding, business angel co-investing with other forms of finance, minority private equity investments in family firms, and the performance of private equity funds, before setting out an agenda for further research that relates to other new organizational forms of finance providers—notably, accelerators and sovereign wealth funds. This paper emphasizes the need to take account of the variety of goals of the new organizational forms providing alternative finance and the enterprises they fund, such as social enterprises and student entrepreneurship ventures. It points to the need for studies on the real economic impact of the new forms of alternative finance provision. [ABSTRACT FROM AUTHOR]

The aviation sector, essential for global trade, tourism, and cultural interaction, has evolved from a luxury to a vital economic component, generating billions annually. However, the Covid-19 pandemic has drastically reduced air travel demand and revenue, leading many airlines into financial distress, insolvency, and potential bankruptcy. This study examines the legal and policy frameworks addressing aviation insolvency, historical and contemporary causes of financial distress, and the impact on airline employees, clients, and suppliers. It evaluates government bailout programs and the role of aviation leasing companies and financiers in the bankruptcy process. Additionally, the study analyzes cross-border bankruptcy issues and their effects on global coordination. Besides discussing alternative funding and investment models for the industry’s recovery, the paper offers insights and recommendations for policymakers, to ensure the aviation sector’s long-term viability and resilience postpandemic. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to review, systematize and integrate existing research on alternative investments. This study conducts performance analysis comprising production timeline, country-wise contributions, analysis of sources, affiliations, the geography of authors and citations of studies on alternative investments. Design/methodology/approach: This study adopts a thematic and bibliometric analysis methodology on 570 papers identified from mainstream literature on alternative investments. This study provides an analysis of science mapping, including co-citation analysis, bibliometric coupling, word analysis and trending topics on alternative investments. In addition, the study presents thematic analysis by classifying existing studies into nine themes. Findings: Alternative investments provide diversification benefits and play a critical role in portfolio construction, and the research on alternative investments has gained momentum in recent times. This study finds that hedge funds, private equity, artwork, collectibles, commodities, fine wine and venture capital have remained prominent themes in the field. Investments in cryptocurrencies are an emerging area in the research on alternative investments. Research limitations/implications: This study limits itself to the papers published in the area of finance and economics listed on the Scopus database. Originality/value: This study provides quantitative bibliometric analysis and thematic analysis of the extant literature on alternative investments and identifies the areas that could be developed to advance research on alternative investments. [ABSTRACT FROM AUTHOR]

The rapid emergence of new asset classes causes many challenges that professional and institutional investors face while considering allocating funds to these assets. With the new asset class — in this case, crypto assets — challenges are often related to regulation and technological implementations. The custody of crypto assets fundamentally differs from how traditional assets — such as equities — are kept safe and sound. Because of this, it is crucial to understand the fundamental difference of crypto asset custody as institutional adoption arises and clarify different strategic, operational and regulative trade-offs between other solutions. This paper discusses different solutions for crypto asset custody and their perceived trade-offs. As the industry and the need for trust grow, it is crucial to have proper and clear regulation frameworks and operating environments for reliable custodians to thrive. To further clarify perceived trade-offs and requirements, one alternative investment fund from the Nordics was interviewed. From the interview, a few simplified assumptions were created related to the decision process of crypto asset custody solution, which institutional actors might need to consider. In addition to various strategic and operational requirements, one of the essential factors in choosing a custody solution for institutional actors (ie in the Nordics) may be the local laws and regulations related to the field of crypto assets. Local regulations may force institutional actors to rely on third-party solutions, which may have different trade-offs compared to other solutions. [ABSTRACT FROM AUTHOR]

Copyright of Business Consultant / Poslovni Konsultant is the property of FINconsult Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Risk is a big concern for anyone contemplating investing in new, especially innovative ventures. However, if successful, the returns can be extraordinary, serving as an impetus for many venture capitalists to provide greater funding. Still, many new ventures never see the end of the tunnel, and success stories are scant. The venture capital market is growing, yet many investors feel on edge when investing in new and innovative ventures. This paper is based on field survey data to evaluate the importance of risk and return components of an alternative venture investment approach called diminishing Musharakah (DM). DM has roots in Islamic modes of investment that are more suited for ventures with a higher risk profile. This paper focuses on four key ingredients, i.e., due diligence (DD), flexibility (Flex), moral hazard reduction (MHR), and risk reduction (RR) inherent in this mode of investment. All these components contribute towards the end goal of any investment, i.e., value enhancement (VE). DM is based on investment modes approved by Islamic law, called Shariah, and Islamic jurisprudence, called Fiqh. The analysis and the paper's results show that the proposed model is perceived as flexible enough to accommodate a wide variety of investment possibilities. The model carries the potential to encourage venture investment through various stages of growth of a venture. The findings are based on original perception data through a field survey across a broad spectrum of banking users who were interested in alternative and Islamic modes of investment. Findings and analysis of the survey data strongly support our connotations. We propose that the Shariah-based investment model presented in this paper will bring a vast new market into play, i.e., the Islamic money market, thus providing greater venture financing possibilities. As a result, we hope that the number of successful venture investment projects will significantly increase over time as we put the proposed investment model into use. [ABSTRACT FROM AUTHOR]

This paper analyzes the influence of financial literacy in relation to investment decisions in collectibles. The focus is on assessing the influence of financial literacy on the preparedness of individual investors to make complex financial decisions with respect to investment in collectibles. This paper also evaluates the effect of financial literacy among investors on the financial behavior, financial skill, and perceived knowledge dimensions with respect to collectibles. The paper attempts to the influence of financial literacy among investors opting collectibles as an alternative investment option. [ABSTRACT FROM AUTHOR]

Transition to alternative energy sources is increasingly recognized as a vital component of global efforts to mitigate climate change and foster sustainable development. This study examines the impact of alternative energy investments on employment, focusing on the renewable energy sector's role in generating job opportunities. Paper explores the mechanisms through which investments in alternative energy projects, such as wind, solar, hydroelectric, and biomass, influence employment outcomes. Key factors influencing employment generation, including technological innovation, infrastructure development, policy frameworks, and market dynamics, are analyzed to understand the complex interplay between alternative energy investments and labor markets. The study highlights the potential for alternative energy investments to create diverse employment opportunities across various sectors. Furthermore, it examines the socio-economic benefits of renewable energy projects in terms of job creation, skills development and income generation. By elucidating the relationship between alternative energy investments and employment, this research contributes to a deeper understanding of the transformative potential of renewable energy transition in devising strategies to maximize the socio-economic benefits of sustainable energy development. Findings show upward trend in average monthly nominal wages and salaries within the sector reflects positive growth in labor compensation, potentially influenced by factors such as rising demand for skilled labor and productivity improvements. Additionally government agencies and international organizations are main drivers of green investments and sustainable development in Azerbaijan. [ABSTRACT FROM AUTHOR]

We comprehensively study the impact of oil market volatility on mutual fund flow. In particular, using an extensive dataset on Saudi Arabia covering virtually all equity funds over 2006–2017, this paper provides the first analysis of the linkages between fund flow and oil market volatility. Our main findings show that investors shift substantially their asset allocation to the equity mutual fund sector in periods of high volatility. Our further evidence suggests that flow to high oil-exposed funds is more sensitive to oil volatility than low oil-exposed funds. This is consistent with investors valuing professional management highly during risky periods in a setting where alternatives to equity investment are limited. Our study provides new evidence for a fast-growing market and reveals important implications for the mutual fund market which helps investors, academics and regulators to better understand the behaviour of this market. [ABSTRACT FROM AUTHOR]

This paper develops a formula to numerically estimate the unsubsidized, fair-market value of the toxic assets purchased with Federal Reserve loans. It finds that subsidy rates on these loans were on average 33.9 percent at origination. In contrast, by the 3rd quarter of the 2010, there was on average no subsidy in TALF loans. The theoretical model is used to predict the early redemption of Term Asset-Backed Securities Loan Facility (TALF) loans used to purchase commercial mortgage-backed securities (CMBS). The predictions of the model are strongly supported by the data. In addition, this paper looks at the determinants of early redemption. CMBS originated inside the peak bubble years of 2005–2007 were much less likely to be redeemed early. The giant investment managers, Blackrock and PIMCO, were much more likely to redeem their TALF loans early than smaller investment managers. [ABSTRACT FROM AUTHOR]

Broadband projects nowadays represent a valid investment alternative to pursuing smart city goals, particularly considering the rapid development that has affected the telecommunications industry. However, for potential investors, the valuation of these projects is a demanding activity because they are characterized by the uncertainty of future user demands, the competition risk, and the sequential nature of investment. In this paper we propose an innovative methodology to valuate the broadband projects taking into account these three peculiarities. This model consists of combining the compound real options approach (ROA), able to price the sequential uncertain projects, with the Options Game (OG) approach used in the literature to valuate uncertain investments affected by competition risk. This paper contributes to the existing literature by expanding the OG model to fit the broadband characteristics in discrete time. We also propose a case study to implement the theoretical approach. Results show that, despite their uncertain nature and competition risks, broadband investments represent a profitable investment alternative when pursuing smart city goals. [ABSTRACT FROM AUTHOR]

Copyright of Financial Internet Quarterly 'e-Finanse' is the property of Sciendo and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Mineral Resources Management / Gospodarka Surowcami Mineralnymi is the property of Mineral & Energy Economy Research Institute of the Polish Academy of Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: In 2014, real estate investment trust (REIT) emerged as a new alternative investment option in India. This research aims to give an empirical authentication of the Indian REITs performance from April 2019 to July 2022 across a range of investment variables. Design/methodology/approach: Using monthly total returns in Indian Rupee, risk-adjusted Indian REIT performance and investment portfolio characteristics are examined. Indian REITs' potential in a diversified multi-asset portfolio is analysed using the mean-variance analysis, asset allocation diagram and efficient frontier. Findings: During April 2019–July 2022, Indian REITs provided a lower return than stocks but outperformed bonds despite coronavirus disease 2019 (COVID-19) lockdowns, which hurt the traditional working from office concept. The study also examined REIT allocation to an Indian mixed-asset portfolio and the benefits of a diversified portfolio. Practical implications: Indian REITs provide a liquid, transparent alternative to direct property for investors seeking exposure to Indian real estate markets. Indian REITs gave real estate companies an extra funding source and investors an alternate asset. This paper explores Indian REITs' potential opportunities, given that domestic and foreign investors' demand for transparent property investment in India. The analysis found a positive early performance despite a challenging environment. Originality/value: This paper offers the first empirical performance validation of Indian REITs as a way to obtain exposure to commercial property in India and the REITs' role in a diversified asset portfolio. The authors' study improves investors' decision-making abilities by providing empirically validated, valuable and practicable property investing insights. [ABSTRACT FROM AUTHOR]

Until now, classic investment appraisal approaches have exclusively focused on financial success. However, with the rising interest in and need to deal with sustainability, social and ecological aspects have to be considered in investment decisions. The aim of this paper is to present a systematically developed and applicable investment appraisal model, that will not only include financial aspects, but will cover sustainability issues as well by applying the concept of the triple bottom line. Thus, eight controlling and sustainability experts coming from backgrounds of academia and departments of small to medium sized companies in Germany were questioned in semi-structured interviews regarding their perceptions and requirements for a sustainability driven investment calculation model. As a result, there was no common consensus about how to integrate sustainability into an investment evaluation. Even though, sustainability is anchored in the strategy of many companies, clear guidance on planning and control are often missing. The interviewees expressed a need for a simple calculation model adoptable to each company's strategy making it flexible in terms of inclusion of sustainability factors and in weighing up between economic success and sustainability. Literature review and interview results lead to a systematic four-step framework. A materiality analysis will be used to detect relevant financial, ecological, and social features addressed by a potential investment. These features will be listed, measured, and ranked. By applying this approach, a multi-dimensional investment strength profile can be created for each investment alternative. This will then be forming the base for the ability to make solid investment decisions based on the triple bottom line. This paper presents an approach that needs to undergo further testing in practice for it to be verified as a generic framework. Further research is also needed to develop instruments particularly for social features to allow a more precise measurement. [ABSTRACT FROM AUTHOR]

The recent buzz across India after the 2022 budget, where there has been a separate tax levy of 30% on the income from digital assets, is the concept of cryptocurrency. There has been a sudden increase in the number of people investing in digital currency. This research aims to investigate the knowledge of cryptocurrency and factors that may play a role in the acceptance of cryptocurrency as a mode of payment. The questionnaire was distributed to 220 respondents, collecting their responses through an online survey method. Structural equation modelling was performed to analyse and test the hypothesised relationships. The results show that there is knowledge of cryptocurrency among investors. Additionally, gender plays a significant role in cryptocurrency investment. These findings would be helpful in the future for the significant fintech companies who are planning to revolutionise the mode of payment through cryptocurrency and also for further financial research that takes place in the future. [ABSTRACT FROM AUTHOR]

Given the broad scope of Ethereum and the wide range of its decentralized applications, this paper investigates its hedging and safe haven capabilities against main fiat currencies, stock and bond indices in the US and Europe, and crude oil and gold markets. We use daily data from January 2016 until February 2021 and apply percentile regressions and crisis event interaction analysis by selecting four worldwide events including US presidential elections, the Brexit referendum, and COVID-19. We reveal that Ethereum does not act as a hedge or a safe haven against fiat currencies, stock and bond indices, and gold. However, it does act as a strong safe haven against crude oil in calm and turbulent periods and against European bonds during market turbulence. The study provides insights to regulators and investors into the potential role of Ethereum in investment decision-making and protecting financial market participants in the US and EU. [ABSTRACT FROM AUTHOR]

Purpose: The paper investigates the effect of corruption on corporate investment efficiency around the world. Design/methodology/approach: The sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide. Findings: The authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries. Originality/value: The paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency. 研究目的: 本研究擬探討世界各地貪污腐敗對企業投資效率的影響。 研究設計/方法/理念: 研究樣本涵蓋42個國家，30,074間公司，218,350個觀察。測量貪污腐敗的方法乃基於國際透明組織的腐敗感知指數、世界銀行的腐敗控制指數和國際國家風險指南的貪污指數。 研究結果: 研究結果顯示、貪污與投資效率成負相關。以企業投資的各種測量方法、以及用其他的回歸分析方法來進行的強度檢驗，均顯示一致的結果。而且，我們亦發現，在對股東的保障較大的國家，貪污所帶來的影響也會較大；同樣地、對股東的保障較小的國家，貪污的影響也相應會較輕微。 研究的原創性/價值: 本研究對文獻有兩個重要的貢獻。首先，研究證明了貪污腐敗的環境亦是企業投資效率的決定因素；其次，研究亦證明給股東的法律保護會減低貪污對企業投資效率所帶來的負面影響。 [ABSTRACT FROM AUTHOR]

This paper proposes a predictive approach to forecast future hedge fund performances and reporting stops to a commercial database within a subsequent year. We found that gradient boosting of decision trees is well suited to make a prognosis about the future development and reporting stops of hedge funds. The derived models are trained and evaluated using a panel of 5,592 individual hedge funds. We rank the impact of 22 variables that are computed out of hedge fund reporting (micro variables) and three different market environments (macro variables) on the predictability of hedge fund performance. In this way, we show the economic reasonability of the computed models and demonstrate the superiority of statistical learning algorithms. [ABSTRACT FROM AUTHOR]

This study adopts a composite threshold model that differentiates between the upside and downside betas of the major US-based renewable and non-renewable exchange-traded funds (ETFs) during heightened uncertainty. It is found that downside betas for both renewable and non-renewable energy ETFs are significantly greater than upside betas. However, in a highly uncertain market, renewable energy ETFs tend to enjoy higher upside gains than the fossil-fuel ETFs. The results suggest that renewable energy ETFs have great potential to generate high returns, but the downside risk associated with renewables should be mitigated by government incentivizing the use of renewables in both domestic and foreign markets. Investing in renewable energy is not only good for the environment but also compared to other investment alternatives (including fossil fuels) it provides better risk-adjusted returns. During the last 5 years, some renewable energy ETFs have even outperformed several well-established sectoral ETFs. This paper finds that there is a more favourable business case for investing in renewables than common perception would suggest. [ABSTRACT FROM AUTHOR]

Concepts are introduced and applied for analyzing and selecting arbitrage portfolios in the face of uncertainty about initial positions and risk preferences. A stochastic arbitrage opportunity is defined as a zero-cost investment portfolio that enhances every feasible host portfolio for all admissible utility functions. The alternative to the existence of such investment opportunities is the existence of a solution to a dual system of asset pricing restrictions based on a class of stochastic discount factors. Feasible approaches to numerical optimization and statistical inference are discussed. Empirical results suggest that equity factor investing is appealing for all risk-averse stock investors with a wide range of initial position and sufficiently low transactions costs by mixing multiple factor portfolios with high after-cost appraisal ratios, low mutual correlation, and negative exposures to the relevant host portfolios. These findings weaken the case for risk-based explanations for the profitability of factor investing. This paper was accepted by Kay Giesecke, finance. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4892. [ABSTRACT FROM AUTHOR]

Nowadays innovation is one of the vital success factors of new SMEs. Venture capital can promote the innovation of investee firms. This paper aims to identify and prioritize factors affecting the innovation of investee firms. Initially, by reviewing the literature, 18 factors were extracted. Then by statistical analysis, six factors with less importance were removed. The 12 factors with more importance advanced to the final step to be prioritized by Fuzzy DEMATEL method. Results demonstrated that the most important factors are providing valuable information from the industry, cooperation and contact with the industry activists, and informing about the possible threats and opportunities. The findings of this paper provide key insight into alternative investment, which is a novel area in Iran’s emerging financial markets. In other words, it can support both sides of a venture capital investment process to know which factors are of more importance to boost the possibility of success. [ABSTRACT FROM AUTHOR]

This paper attempts to understand the dynamic interrelationships and financial asset capabilities of Bitcoin by analysing several aspects of its volatility vis-a-vis other asset classes. This study aims to analyse the volatility dynamics of the returns of Bitcoin. An asymmetric GARCH model (EGARCH) is used to investigate whether Bitcoin may be useful in risk management and ideal for risk-averse investors in anticipation of negative shocks to the market (leverage effect). This paper also examines Bitcoin as an investment and hedge alternative to gold as well as NSE NIFTY using a multivariate DCC GARCH model. DCC GARCH models are also used to check whether correlation (co-movement) between the markets is time-varying, examine returns and volatility spillovers between markets and the effect of the outbreak of COVID-19 in India on the investigated markets. The results show that given the supply of Bitcoin is fixed, low returns realisation is equivalent to excess supply over demand wherein investors are selling off Bitcoin during bad times. The positive co-movement between Bitcoin and gold during the COVID-19 outbreak shows that investors perceived Bitcoin as a relatively safe investment. However, overall analysis shows that Bitcoin was not considered a safe hedge and an investment option by Indian investors during the study period. [ABSTRACT FROM AUTHOR]

Purpose -- This paper aims to investigate whether enhanced requirements result in the depositories exiting the business. Furthermore, this paper attempts to analyse prospective changes to the operating structures caused by the Alternative Investment Fund Managers Directive (AIFMD). Most importantly, this paper discusses the processes to evaluate and manage counterparty risk relating to prime brokers. AIFMD makes fundamental changes to the depository liability and managing counterparty risk by making a depository bank liable for any losses to investor assets, even those held within third-party custodians appointed by the depository. Depositories will also need to calculate the probability of default of their sub-custodians and use complex credit models to calculate any capital requirements under the fourth Capital Requirements Directive (CRD IV). Design/methodology/approach -- This paper is based on an insightful secondary analysis of the AIFMD with practical implications drawn for depository banks. The analysis of this topical research has been broken down into the following sections: assessing and managing counterparty risk of prime brokers; insurance against defaults of prime brokers; and regulatory-driven challenges and changes to depository banks. Findings -- The post-Lehman banking industry has realised that counterparty risk cannot be ignored. This has triggered heated debates among regulators and practitioners whereby any depository bank should clearly separate the assets of its clients from the depository assets and its own assets. This paper argues that the custodian services will witness consolidation with the big players remaining and small custodians forced to leave the business in light of the enhanced liabilities under the AIFMD. In addition to this, this paper has stressed that assessing counterparty risk should be supported by an insightful analysis of the culture of a prime broker; its legal, structural and regulatory safeguards; and quality of assets. Moreover, managing risks associated with prime brokers entails significant costs to depositories. Thus, depository banks are advised to factor these costs into their pricing models. Originality/value -- Given the magnitude of recent regulatory initiatives and complex challenges faced by depositories, an important question arises whether depository banks would exit the business in light of the regulatory-induced liabilities. This paper addresses the aforementioned question and provides practical implications into managing emerging risks by depository banks. At this point, the majority of depositories are in a process of developing in-house solutions for managing risks related to prime brokers, and hence would benefit from practical insights into these processes that are provided in this paper. [ABSTRACT FROM AUTHOR]

Copyright of Mexican Journal of Economics & Finance / Revista Mexicana de Economia y Finanzas is the property of Instituto Mexicano de Ejecutivos de Finanzas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of this paper is the presentation of all available investment possibilities of the household sector in Serbia. The level of these investments is defined by the level of disposable income, financial literacy, investment alternatives and the development of the financial market and its instruments. Most of the investments in the household sector in Serbia are directed in savings, mainly in foreign currency savings. Other possibilities including investment in different types of bonds, but also an investment in stock and investment funds and other types of savings like voluntary pension funds and life insurance. The main limitation of the household investment possibilities in Serbia is the capital market which is shallow and future activities should be focused on its development. Capital markets can play a strong role in economic growth and provide financing for the state and the private sector by offering access to domestic and international financial resources. The primary function of capital markets is therefore to create the connection between various types of investors, such as households, voluntary pension funds, insurance companies, commercial banks, and foreign investors and different issuers, mainly large and medium-sized real sector companies, financial sector and governments. [ABSTRACT FROM AUTHOR]

As a result of one of the great human tragedies of the 21st century, the world has been enduring some form of 'lockdown' or curtailment of 'normal' since early 2020 due to the global COVID-19 pandemic. The impact of COVID-19 on the human condition has been immeasurable; sociologists and psychologists will have source material for many decades as they attempt to put this virus and its ramifications on the world into context. Most of those reading this are neither of the above, however, so the focus for this paper will be the effects of COVID-19 on the asset management industry and how we as an industry operated during the pandemic. Most importantly, this paper will seek to explore trends that were accelerated as a result of the pandemic and what the future operating model for the asset management industry could look like. As my core expertise is the alternative asset management industry, this commentary will focus mostly on that particular subset of the industry, but certain aspects will be applicable to different types of fund operating models across the spectrum. [ABSTRACT FROM AUTHOR]

Purpose: This paper examines the effect of cryptocurrencies on the portfolio risk-adjusted returns of traditional and alternative investments within an emerging market economy. Design/methodology/approach: The paper employs daily arithmetic returns from August 2015 to October 2018 of traditional assets (stocks, bonds, currencies), alternative assets (commodities, real estate) and cryptocurrencies. Using the mean-variance analysis, the Sharpe ratio, the conditional value-at-risk and the mean-variance spanning tests. Findings: The paper documents evidence to support the diversification benefits of cryptocurrencies by utilising the mean-variance tests, improving the efficient frontier and the risk-adjusted returns of the emerging market economy portfolio of investments. Practical implications: This paper firmly broadens the Modern Portfolio Theory by authenticating cryptocurrencies as assets with diversification benefits in an emerging market economy investment portfolio. Originality/value: As far as the authors are concerned, this paper presents the first evidence of the effect of diversification benefits of cryptocurrencies on emerging market asset portfolios constructed using traditional and alternative assets. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the downside risk of alternative investment funds (AIFs) in a cross-country setting over a period of 2015–2021, using popular Value-at-Risk (VaR henceforth) models, and test the efficacy of such models in capturing the volatility posed by these funds. We estimate VaR in the presence of three error distributions, including normal distribution, Student's t distribution, and GED distribution. Using weekly return data of 991 AIFs from 28 countries, over the period 2015–2021, we find that most of the funds, irrespective of country representation, exhibited a significant proportion of their weekly returns to be negative. To statistically validate our findings we use three backtesting approaches, i.e., Jorion's failure rate, Kupiec's proportion of failure (POF) tests and Christoffersen's independence test. Our findings indicate the presence of significant downside risk for AIFs, which these popular VaR models are unable to capture. These findings highlight the need for investors and fund managers to be cautious when relying solely on popular VaR models to manage downside risk in AIF and suggest that further research is needed to develop more effective risk management strategies for AIF, particularly in light of their complex structure and asymmetric return distributions. [ABSTRACT FROM AUTHOR]

Leasing valuation is a topic that has aroused considerable interest in business circles. This paper examines leasing from the point of view of the lessor who can decide to leave the contract due to default. We analyze in introducing a model in which the lessor decides whether or not to terminate the contract at a given point in time, comparing it with the cost of capital of alternative investments. The proposed model is stochastic, and it is strongly based on correlated random walks, making it more adaptable to real-world circumstances. Furthermore, we propose a recombinant binomial tree based on correlated random walks, performing numerical simulations starting from CIR and Vasicek models. We will point out that as the rate of cost of capital of an alternative investment increases, the optimal boundary curve decreases, so the lessor leaves, while as the past interest rates increases, the curve rises and the lessor will have a concrete interest in maintaining the contract. [ABSTRACT FROM AUTHOR]

This paper studies the impacts of geographic proximity and investment connection on the outward foreign direct investment (OFDI) decisions by Chinese multinational firms, including both greenfield investment and cross‐border merger and acquisition. We model firms' OFDI expansion with the lagged spatial structure, and collect outward FDI data of 3479 Chinese multinational firms from 2002 to 2013 whose investment destination covers more than 160 countries. We find that the spatial expansion of firms' existing OFDI play an important role in shaping their future investment decisions. Firstly, firms tends to invest in destinations that are closer to China, and expand further into destinations that are geographically closer to their existing OFDI locations. This is the geographic network effect. Secondly, we also find that firms are more likely to invest in countries with more intense FDI from China, and extend their OFDI networks to destinations with stronger investment connections with their existing subsidiary locations. This is the investment network effect. We show that these two effects are robust to alternative investment and geographic network measures and further controls. [ABSTRACT FROM AUTHOR]

This paper assesses the impact of alternative assets on the performance of Brazilian asset portfolios. Although alternative assets are largely studied throughout the world, that is not the case for Brazil as there are just a few studies on the topic. As the Brazilian capital markets are growing at a fast pace, the high correlated aspect of the market calls for measures to ensure balanced returns for the long run, therefore, the insights of the study may support investors during the process of asset allocation. In this study the alternative assets were divided into two categories: Brazilian alternative assets and international alternative assets. Performance measures were obtained from a portfolio comparison and through a Markowitz frontier analysis. The results show that adding alternative assets (Brazilian or international) to a portfolio usually generates higher returns with lower risks, leading to better risk adjusted results and an overall more balanced portfolio. [ABSTRACT FROM AUTHOR]

In this paper we develop a co-investment mechanism for promoting early investment in Start-up Firms. Focusing on the (uncertain) payoffs earned by a Public Venture Capitalist (PVC) and an Independent Venture Capitalist (IVC), we model each of the alternative mechanisms as an investment timing real option and illustrate that co-investing might be the most effective mechanism to foster investment in Entrepreneurial Firms. Grounded on this theoretical framework, we list a set of both public policy and managerial implications. [ABSTRACT FROM AUTHOR]

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In this paper, we discuss the use of multi-criteria analysis for investment alternatives as a rational, transparent, and systematic approach that reveals the decision-making process during a study of influences and relationships in complex organizational systems. It is shown that this approach considers not only quantitative but also qualitative influences, statistical and individual properties of the object, and expert objective evaluation. We define the criteria for evaluating startup investment prerogatives, which are organized in thematic clusters (types of potential). To compare the investment alternatives, Saaty's hierarchy method is used. As an example, the analysis of three startups is carried out based on the phase mechanism and Saaty's analytic hierarchy process to identify investment appeal of startups according to their specific features. As a result, it is possible to diversify the risks of an investor through the allocation of resources between several projects, in accordance with the received vector of global priorities. [ABSTRACT FROM AUTHOR]

This research paper attempts to analyse Art as an alternative investment asset class in the emerging economies with linking personality factors to investor behaviour. The purpose of study is to analyse the influence of BIG FIVE personality factors in investment in art as an alternative asset class among the investors of emerging economies. Earlier the investment pattern was only bank deposits, bonds, fixed deposits, schemes, etc. but these days it has evolved into alternate investments. Alternative investments include venture capital, hedge funds, private equity funds, art and antiques, commodities, derivatives, Real Estate Investment Trust (REIT), Mortgage based securities (MBS), etc. and more so investors are looking into investment in collectibles such as Art investment. For the purpose of this study, the primary data will be collected from respondents through a structured questionnaire to analyse the type of personality who invests in Art as an alternative investment. [ABSTRACT FROM AUTHOR]

The offshore floating wind-solar-aquaculture (WSA) system with its advantages such as strong seakeeping ability, considerable power generation, and full utilization of ocean space and water resources will have a bright prospect in the future. In order to accelerate the sustainable development of the energy industry, it is very important to build a reasonable investment decision-making framework. Therefore, this paper aims to build a multi-criteria group decision-making (MCGDM) framework for investment decision-making of this project. Firstly, a comprehensive criteria system has been established. Secondly, probabilistic language term sets (PLTSs) are introduced to describe the uncertainty and fuzziness of decision information. Thirdly, the expert weight determination model is established based on the correlation measure and correlation coefficient of PLTSs, and the PL-fuzzy decision-making trial and evaluation laboratory (DEMATEL) method and the information entropy method are introduced to determine the subjective and objective weights of the criteria. In addition, considering the decision maker's psychological behavior, we choose probabilistic language the interactive and multiple attribute decision-making (TODIM) method to determine the optimal investment alternative. Finally, we apply the proposed framework to a case study. The results illustrate that the alternative A3 possesses the optimal comprehensive performance with the overall value is 1. Then, we conduct sensitivity analysis and comparative analysis to verify its robustness and feasibility. Scenario analysis in TODIM method showed that it is reasonable to express decision preference by setting different recession coefficients in the actual decision-making environment. This study can provide some reference for decision-makers, and also extend the method of decision-making field. [ABSTRACT FROM AUTHOR]

This paper studies the dynamic asset allocation problem faced by an infinitively lived commodity-based sovereign wealth fund under incomplete markets. Assuming that the fund receives a non-tradable stream of commodity revenues until a predetermined date, the optimal consumption and investment strategies are state and time-dependent. Using data from the Norwegian Petroleum Fund, we find that the optimal demand for equity should decrease gradually from 60% to 40% over the next 60 years. However, the solution is particularly sensitive to the correlation between oil and stock price changes. We also estimate wealth-equivalent welfare losses, relative to the optimal rule, when following alternative suboptimal investment rules. [ABSTRACT FROM AUTHOR]