Banks Ownership Structure Risk And Performance: Fill & Download for Free

Typically, all information used in financial analysis of public companies is available through a variety of filings.Investment BankingIn investment banking, typically a public information book (PIB) is created at first. This is just an aggregate of all the most recent publicly-available information on the company. Usually, the PIB includes the following:General public information (Company information and financial data from FactSet, Capital IQ, and Bloomberg).Prospectus (usually follows a major event, like M&A, equity offering, etc.)Annual reportForm 10-KForm 10-QProxy statement - information about company shares and shareholdersResearch reports (sell-side equity research)News run (usually for the past 2-6 months if available, from company website or Bloomberg)Ownership run (tracks ownership structure of a company)From this, a company profile can be constructed. This typically includes a company overview, market statistics, a financial overview (projections, statements), stock price performance, leadership, products, and ownership. The purpose of this is to gain an understanding of the company itself - how it's segmented, how it's performed in the last year, or any important events to take into consideration.Then from there on, more specific analyses are conducted. For example, for an acquisition ideas presentation, a variety of things need to be taken into consideration:Determination of fit (size, industry, technology, synergies, etc.)Target's potential (organic growth prospects, management talent, etc.)Financial considerations (target leverage, accretion/dilution of shares, market perception)Legal considerations (anti-trust, etc.)Then the target is examined for availability (whether or not they're likely to sell). Signs for a lack of availability include:Significant insider control with no need for liquidityFamily-owned with clear-cut succession strategyMajority owned by another company for which holding onto the target company is a clearly beneficial choiceStrong and consistent financial performanceCurrent parent is clearly the best owner for the target companySigns of availability include:Owned by a private equity firm looking for an exitFinancial underperformanceNeed for capitalShareholder discontent/activismManagement lacking in talent (failure to grow organically, struggling performance, etc.)Then, from there on, models are constructed (pro-forma merger models, DCF, LBO if applicable, comparable companies, precedent transactions) which are used to justify a purchase price for a strategic transaction. I will not run through how to build the models, as it would not be economical for me to explain here. I suggest reading Investment Banking by Rosenbaum & Pearl for insight into modeling, as well as Macabacus, which is a great web resource.Hedge FundsAt the hedge fund where I work (long/short fundamental), the analyses are actually a lot less quantitative. Our fundamental financial analysis process focuses mainly on determining whether or not the current market price is justified given the risks associated with the stock.For example, the Apollo Group (NYSE: APOL) was trading at just shy of 6x earnings (P/E) when I was looking at it as a potential investment opportunity. Because my fund focuses on value investing, such a low P/E clearly presented a possibility for profit if all the negativity and bearishness surrounding the industry were unjustified. I did a lot of investigating on for-profit education in general, looking at education journals and objective surveys of academic performance and cost measures, as well as Senator Harkin's very harsh report detailing the failure of for-profits on delivering an education worth the cost.In the end I presented a thesis to not invest because:APOL's admirably optimistic attempts at restructuring operations are too late in the game. While they do streamline costs, the rate at which costs are declining is far overpowered by the rate at which revenues are fallingInsiders are selling shares. Control is also held 100% by a single party (only one class of voting shares which is all owned by one guy), which is a fundamentally broken ownership structureEnrollment is dropping steeplyPublic perception of for-profit education is almost universally negativePublic scrutiny of for-profit education is tightening, especially with Obama's recent presidential win. It's unlikely that the already harsh regulatory environment will mellow anytime soonHigher Education Act is up for revision again, and it looks like the rules will only get worse for institutions like ApolloApollo derives ~85% of earnings from government, which is just too reliant. Recent budget cutbacks could negatively impact the company's earningsI may have forgotten some reasons, but you get the picture.I built comps and precedent transactions models but that was it - did not need a DCF (very unreliable for a company with such an unpredictable future) and chose not to build an LBO because I didn't see my fund investing in the company and felt it would be a waste of time.I know this was an example but I hope it outlines the research process. We look a lot more at fundamentals and potential for growth with regards to the stock price. More quantitative means of analysis, like modeling, are reserved for when they're actually needed. This allows fund analysts to cover more companies at once and not waste time building models they don't need.I hope this helps. I'd be happy to answer any questions, just comment below!Don't really know how private equity financial analysis works, but I imagine it's similar to investment banking except looking at PE related financial measures, like leverage or FCF yield.

Research in Finance can primarily proceed along the following sub areas:Accounting : This includes studies on Earnings response coefficients, event studies, DID specifications (both for before and after analysis of Tax reforms, regulations and events defining crisis, M&A or CEO changes for example) Earnings management and many other interesting constructs. These get especially interesting for measuring systemic risk and Financial reporting for Banks and institutions, Analyst following and financial reporting and other related topics.Corporate Finance and Governance: Regulation, Capital Structure, Items related to managing the Finance Departments of firms or Financial firms ( independent because these are separate topics) , Mergers and Acquisitions, CEO and Executive compensations, Board composition and performance, factors and Agency that helps corporate performance vs factors that impede firm performance, Private Equity, Bank Finance and institutional ownership, Real options pricing, theory of contracts, Asymmetric information, Theory of the firm, Transaction cost theoryFinancial Markets: Risk management, systemic risk and idiosyncratic risk and firm performance topics relate to both Accounting and Corporate Governance fields above, Equity markets and indices, Performance of price and returns time series for firms and markets, market models and asset pricing models including the Fama French 3 factor models(Cross section of returns), Fixed income markets, Derivatives markets including Indices, Futures and Options , Jensen’s alpha and other measures of Fund performance, Efficient Markets Hypothesis and Mean Variance Optimization theory ( now adding other strategies for portfolio optimization)Banking and Financial Institutions: This could include all the sections above, post crisis regulation, CDS markets (Financial Derivatives), Banking regulation, Bank Consolidation, MNC Bank performance, Global Bank performance, Bank Finance channel performance, Bank performance , Credit Risk management, MBS, ABS and other , inter bank markets, Operational Risk and Market Risk models.Applied Macroeconomics and Empirical Finance: Currently a hot button topic, including links to economic growth (especially banks and financial development), post crises behaviour, emerging markets vs developed world business, Emerging market multinationals, Bank regulation, cryptocurrency, market spillovers and trade, FDI, neo classical economics vs. game theoretic economics and Prospect theoryGiven that Business cycles exist, and also because Man made history is consigned to dustbins again and again only to be picked up again and rewritten , reenacted and restored (commonly known as history repeats itself) , any or all of these topics could be approached using rigorous theory building (critical thinking), Quantitative and qualitative research methodology and Behavioral Finance and survey based approaches and would be in fashion at different times. One could also make a case for Emerging market behavior becoming important in current times as growth fails the hitherto Developed markets. However, its up to you to make the case for the topicality of your research and who you choose to convince. The larger journal based audience of your research is likely to be very particular about methods for any of the topics you choose and unlikely to be selective about the topics of your research.

I believe the focus of your question is debt, not ownership structure.Most real estate investors do use debt as a tool to boost yield on mid- and long-term investment properties. There are many factors that may justify a higher or lower amount of debt in an investment but, in the explanation below, let's ignore those factors and simply focus on risk as a broader concept.It is the amount of leverage (loan to value) applied that creates a distinction along the investment risk spectrum.An investor with low risk tolerance may have a greater amount of equity than debt in the capital structure in order to mitigate the impact of a shift in the marketplace or asset performance on their equity position. However, they are trading potenital equity yield for security.Conversely, an investor with high risk tolerance may have significantly more debt than equity in the capital structure. This can provide a higher leveraged yield but increases the risk that a substantial amount - if not all - of the equity position may be diminished.The key takeaways here are: (I) debt is a tool that can be used to modulate risk and increase yield; and, (II) investors rarely have no debt at all in the capital structure.