Brief : The Covid-19 pandemic is fueling a productivity boost for the U.S. economy by speeding up workplace digitization, according to an analysis by Goldman Sachs Group Inc. Since the crisis began, annualized growth in output per hour has risen 3.1%, compared with 1.4% in the previous business cycle, Goldman economists wrote in a note. “Stronger productivity growth has been one of the silver linings of the pandemic,” they said. Those gains are most visible in sectors that can take advantage of virtual meetings, and where in-person expenses such as travel and entertainment have scope to decline. The gains are being led by sectors including information technology, professional services and wholesale trade, while online shopping has lifted productivity in the retail sector. Figuring out how to boost productivity among workers and companies is often identified as one of the biggest obstacles for global growth. The ability to work from home has been singled out as one area where gains are obvious, with a recent study estimating a productivity lift in the U.S. economy of 5%, mostly because of savings in commuting time. However, that study found gains were disproportionately available to the highly educated and well-paid, with many lower-paying jobs -- such as in food preparation and other essential industries -- unable to be done remotely.
Brief: The United States remains unparalleled as a magnet for investors, according to the 10th anniversary edition of the Venture Capital (VC) and Private Equity (PE) Country Attractiveness Index. The index ranks 125 countries according to the quality of their investment environment for adventurous VC and PE investors. The countries are analysed and ranked according to thousands of weighted data points covering six key drivers: economic activity, depth of capital markets, taxation, investor protections and corporate governance, human and social environment, and finally entrepreneurial culture and deal opportunities. Based on its strong performance in all six areas, the United States continues to be the index benchmark with a score of 100. It is followed by the United Kingdom, Japan, Germany, and Canada to round out the top five. Within the top 10, the most remarkable gains were seen for China, South Korea and France, who entered the top 10 for the first time. All top-ranked countries are expected to make swift recoveries from the COVID-related recession, especially China (now 7th), where GDP growth is already recorded.
Brief: Proponents of women’s progress on Tuesday launched a political push in Rome to ensure that global pandemic recovery efforts won’t leave women lagging even farther behind, with the chief of the European Union's executive arm lamenting the scarcity of women in political leadership positions. Advocates are using Italy’s current leadership of the G-20 grouping to campaign for pay equality, greater involvement in decision-making and elimination of cultural stereotypes that hinder women’s advancement. “At the next G-20 summit in Rome, I could be the only woman in the group” of leaders, European Union Commission President Ursula von der Leyen told a forum examining where women lag behind and how they can catch up to men. Italy holds a summit of G20 leaders until the end of October. While von der Leyen didn't elaborate, she appeared to be referring to the prospect that Angela Merkel would no longer be leading Germany's government after elections in September. “There could be no better reminder of how long the road towards gender equality still is,” von der Leyen said, speaking by video message at the opening of the three-day forum.
Brief : Three-quarters of asset managers want to embrace the new normal, with only 25% desiring to return to the pre-Covid work environment, according to a survey from Magellan Advisory Partners. Three-quarters of asset managers want to embrace the new normal, with only 25% desiring to return to the pre-Covid work environment, according to a survey from Magellan Advisory Partners. The Post-Pandemic Working Environment study spoke to management teams across 62 fund houses globally, with assets under management ranging from under $1bn to more than $1trn and found that 75% want the post-Covid hybrid working environment to be permanent. There is an overwhelming preference for three days in the office per week to become the norm, with almost 60% of respondents opting for this balance. Regionally, there was some divergence, with asset managers in the Middle East and Africa and the US leaning towards a four-day office week, while employees in Asia-Pacific may find themselves in work just two days out of five. When not in the office, the majority of firms do not mind where their employees base themselves, with 56% stating they would allow staff to work from anywhere in the world that is not their home address.
Brief: The total market value of B.C.’s public companies grew nearly 50 per cent in 2020 to reach record highs, despite the impact of the pandemic on global financial markets, according to a new report from the British Columbia Securities Commission (BCSC). The BC Capital Market Report 2020 shows that the total market value of B.C.-based companies grew 47 per cent in 2020 to $286 billion, compared to 2 per cent growth in the previous year. “COVID-19 rattled B.C. investment markets in the first quarter of 2020, but they rebounded quickly, demonstrating their resilience and strength even during a global pandemic,” said John Hinze, the BCSC’s Director of Corporate Finance. “Not only did B.C. public companies finish the year with a record market capitalization, they also reported record capital-raising, including filing a record number of prospectuses with the BCSC.” The annually produced report provides a snapshot of the province’s capital market activity in the calendar year, detailing how much money was raised by B.C. companies and investment funds as well as how much was raised from B.C. investors.
Brief: Based on performance in the first half of the year, 2021 is shaping up to be a record-breaking year for private equity. In deals, exit activity, and fundraising, the industry its set to outpace previous highs, according to new data from PitchBook. In the second quarter of 2021, private equity deal making “continued at a frenetic pace,” the report said, with funds closing 3,708 deals worth an estimated total of $456.6 billion. For context, the entire year of 2020 saw 5,734 deals with a combined value of $711.6 billion. “We are running out of metaphors to describe record-breaking deal, exit, and fundraising activity,” said Rebecca Springer, PE analyst at PitchBook and co-author of the study. The report attributed the staggering levels of deal activity to various factors, including a partially vaccinated population, high investor confidence in the equity markets, a “frenzied” demand for high-yield debt, and the regulatory nature of the Biden administration. June’s club buyout of Medline Industries, a medical supply company, was cited as an example of the “risk-on” environment for dealmaking.