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Sector convergence in media and entertainment sees divestment intent remain at high levels

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Divestment appetite among media and entertainment (M&E) companies remains at near-record highs, according to the EY Media & Entertainment Global Corporate Divestment Study. The study reveals that 80% of global sector respondents plan to divest in the next two years – up from 33% in 2017 and down slightly from 87% in 2018 –  as they seek funds to invest in digital capabilities and to focus on core assets.

The study indicates that 75% of companies anticipate more large-scale transformational divestments in the next 12 months. With the line between technology, M&E and telecommunications companies increasingly blurring, 68% say convergence is most likely to drive divestment decisions in the next year, while 58% have reinvested proceeds from their last divestment in new products, markets and geographies.

Will Fisher, EY Global Media & Entertainment Transactions Leader, says:

“Technology-driven convergence, the increasing importance of exclusive content and data, shifting consumer behavior and competition from online players are driving M&E companies to continuously evaluate their growth strategies. In this climate, a strong appetite for divestment prevails, with companies looking to pivot more quickly in pursuit of new growth opportunities. The focus should now be around how to operationalize divestments to reach bigger audiences and build scale to compete with growing content production and data costs.”

The study findings are supported by the 19th EY Global Capital Confidence Barometer (CCB), which reveals that more than two-thirds (71%) of M&E companies are now reviewing and reshaping their portfolios at least every six months, as they continue to actively dispose of underinvested assets, businesses that are no longer core to the portfolio, and those best left in the hands of another owner.

And with 78% of Media & Entertainment Global Corporate Divestment Study respondents expecting the number of technology-driven divestments to rise in the next 12 months (up from 75% last year), the drive to fund new technology investments continues to be a key divestment trigger across the sector.

Delays continue to hamper media and entertainment divestment prospects
While divestment intentions are strong across the sector, the study indicates that companies remain slow in initiating the divestment process. Sixty-five percent of respondents say they have previously held onto assets for too long when they should have divested, while 58% state that their last divestment was delayed because they didn’t prepare adequately for associated regulatory requirements.

Fisher says: “As M&E companies continue to review their portfolios more frequently, they will need to ensure that they are also taking steps to prevent delays in divestment decisions, as well as potential value erosion. Preparation is a key differentiator here, and the most successful companies will be those that commit to early planning, while accommodating regulatory requirements, tax risk and private equity diligence where relevant.”

The study further indicates that 90% of M&E companies prioritized value over speed in their last divestment, up from 77% in 2018. Only 50% of M&E sellers describe their last divestment as opportunistic, down from 65% in 2018. The study highlights that, with unplanned divestments being less likely to achieve a sale price and valuation that meets expectations, the imperative for sellers to build a credible value story with supporting data is now more critical than ever.

 

SOURCE EY

Fintech

Chinese fintech attracted investments of USD 962.2 million in 2H 2019

Vlad Poptamas

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Fintech companies in China attracted USD 962.2 million in investments from venture capital, private equity and M&A in 2H 2019, resulting in a total of USD 4,479 million in investments for the whole of 2019, according to KPMG’s Pulse of Fintech H2’19 bi-annual report on global fintech investment trends.

Fintech investment in China took a breather after a massive 2018, but the country’s fintech market continued to see substantial activity and Chinese companies still ranked among the largest fintech deals in Asia Pacific for the whole of 2019. China’s large technology giants continued to focus on growing their reach geographically, making investments or plays well outside of Greater China. Ant Financial, for example, submitted an application for a digital banking license in Singapore in late 2019, while Tencent made a number of significant investments in fintech companies in other regions throughout the year, including Ualá in Argentina.

Investors in China also began to turn their attention to up-and-coming areas of fintech. These include regtech, which has appeal among VC investors because of its ability to leverage artificial intelligence and machine learning to assess risk and identify fraud. China-based investors are also interested in fintech companies that use these technologies more broadly to improve the operations of banks and financial institutions, such as improving operational efficiencies, generate and analyse data, as well as support wealth management.

The third quarter of 2019 saw the People’s Bank of China unveiled a three-year plan to support the development of the fintech industry. Since then, there has already been a number of moves focused on implementation. For example, a fintech sandbox is in development, with testing currently being concluded in Beijing. It is expected that this plan will help fuel future investment in fintech, particularly in key areas like risk management, cybersecurity, big data, artificial intelligence, distributed databases and authentication.

Chris Wang, Partner, Head of Fintech, KPMG China, commented, “China’s central bank and other authority bodies are working to move fintech in the country to ‘2nd half’ as part of their three-year fintech development plan. We anticipate an increased regulation and guidance for the industry and an enhanced infrastructure to support fintech development. For example, sandbox mechanism is being designed and may soon roll out to test the concept of different fintech to make sure they comply with regulations and will achieve the desired results before they enter the market.”

The fintech market in Hong Kong saw some resilience in the fourth quarter of 2019, particularly on the back of Alibaba’s decision to do a secondary listing on the Hong Kong Stock Exchange, which raised USD 11.2 billion, making it the largest listing of the year globally.

Earlier in 2019, Hong Kong issued the first batch of eight digital banking licenses. ZhongAn was the first to launch a digital bank pilot, with others expected to follow suit in 2020. As the licensees continue to formulate their digital bank offerings, Hong Kong could see an upswing in investments in related areas, like KYC, regtech, digital onboarding and communications, and digital banking infrastructure. The issuance of digital banking licences has also spurred traditional banks to improve their own digital offerings and experience.

Avril Rae, Director, Head of Fintech, Hong Kong, KPMG China, said, “We’re starting to see ecosystems evolving with respect to digital banks. Partners are coming together to get digital banking licenses. Once they have their pilot projects underway, and they have proven their technology both internally and to the Hong Kong Monetary Authority, we’ll start to see them leveraging those partnerships more deeply – integrating banking services with other offerings like travel bookings or insurance to provide their customers with a seamless experience.”

 

SOURCE KPMG China

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Fintech

Chinese fintech attracted investments of USD 962.2 million in 2H 2019

Vlad Poptamas

Published

on

 

Fintech companies in China attracted USD 962.2 million in investments from venture capital, private equity and M&A in 2H 2019, resulting in a total of USD 4,479 million in investments for the whole of 2019, according to KPMG’s Pulse of Fintech H2’19 bi-annual report on global fintech investment trends.

Fintech investment in China took a breather after a massive 2018, but the country’s fintech market continued to see substantial activity and Chinese companies still ranked among the largest fintech deals in Asia Pacific for the whole of 2019. China’s large technology giants continued to focus on growing their reach geographically, making investments or plays well outside of Greater China. Ant Financial, for example, submitted an application for a digital banking license in Singapore in late 2019, while Tencent made a number of significant investments in fintech companies in other regions throughout the year, including Ualá in Argentina.

Investors in China also began to turn their attention to up-and-coming areas of fintech. These include regtech, which has appeal among VC investors because of its ability to leverage artificial intelligence and machine learning to assess risk and identify fraud. China-based investors are also interested in fintech companies that use these technologies more broadly to improve the operations of banks and financial institutions, such as improving operational efficiencies, generate and analyse data, as well as support wealth management.

The third quarter of 2019 saw the People’s Bank of China unveiled a three-year plan to support the development of the fintech industry. Since then, there has already been a number of moves focused on implementation. For example, a fintech sandbox is in development, with testing currently being concluded in Beijing. It is expected that this plan will help fuel future investment in fintech, particularly in key areas like risk management, cybersecurity, big data, artificial intelligence, distributed databases and authentication.

Chris Wang, Partner, Head of Fintech, KPMG China, commented, “China’s central bank and other authority bodies are working to move fintech in the country to ‘2nd half’ as part of their three-year fintech development plan. We anticipate an increased regulation and guidance for the industry and an enhanced infrastructure to support fintech development. For example, sandbox mechanism is being designed and may soon roll out to test the concept of different fintech to make sure they comply with regulations and will achieve the desired results before they enter the market.”

The fintech market in Hong Kong saw some resilience in the fourth quarter of 2019, particularly on the back of Alibaba’s decision to do a secondary listing on the Hong Kong Stock Exchange, which raised USD 11.2 billion, making it the largest listing of the year globally.

Earlier in 2019, Hong Kong issued the first batch of eight digital banking licenses. ZhongAn was the first to launch a digital bank pilot, with others expected to follow suit in 2020. As the licensees continue to formulate their digital bank offerings, Hong Kong could see an upswing in investments in related areas, like KYC, regtech, digital onboarding and communications, and digital banking infrastructure. The issuance of digital banking licences has also spurred traditional banks to improve their own digital offerings and experience.

Avril Rae, Director, Head of Fintech, Hong Kong, KPMG China, said, “We’re starting to see ecosystems evolving with respect to digital banks. Partners are coming together to get digital banking licenses. Once they have their pilot projects underway, and they have proven their technology both internally and to the Hong Kong Monetary Authority, we’ll start to see them leveraging those partnerships more deeply – integrating banking services with other offerings like travel bookings or insurance to provide their customers with a seamless experience.”

 

SOURCE KPMG China

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CFP Board Center for Financial Planning Announces Best Paper Winners for 2020 Academic Research Colloquium

Vlad Poptamas

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The CFP Board Center for Financial Planning is pleased to announce the recipients of the 2020 Best Paper Awards that were presented last week in Arlington, Va., during the Center’s fourth annual Academic Research Colloquium for Financial Planning and Related Disciplines.

  • The TD Ameritrade Best Paper Award in Behavioral Finance – Sung Lee of Stern School of Business, New York University, for “Fintech Nudges: Overspending Messages and Personal Finance Management”
  • The Northwestern Mutual Best Paper Award in Insurance/Risk Management – Hossein Salehi, CFP® of California Lutheran University, and Charlene Kalenkoski, CFP® of Texas Tech University, for “The Relationship Between Ownership of Insurance Products and Retirement Satisfaction”
  • The Emerging Scholar Best Paper Award – Derek Tharp, CFP® of University of Southern Maine, for “Consumer Perceptions of Financial Advisory Titles and Implications for Title Regulation”
  • The Best Paper Award in Investments – Da Ke of University of South Carolina, for “Left Behind: Partisan Identity and Wealth Inequality”
  • The Best Paper Award in Household Finance – Nick PretnarAlan Montgomery, and Christopher Olivola of Tepper School of Business, Carnegie Mellon University, for “A Structural Model of Mental Accounting”

A full list of 2020 accepted papers is available here.

“We received many compelling paper submissions this year, but the committee selected those that they felt demonstrated the highest research standards,” said Charles R. Chaffin, Ed.D., director of Academic Initiatives, CFP Board Center for Financial Planning. “We congratulate the winners for their contributions to knowledge and innovation in the financial planning industry.”

The Best Paper series of awards recognizes authors from a variety of disciplines and sub-disciplines that relate to financial planning. The award carries a $2,500 cash prize for the author(s) of each winning paper.

The colloquium gathers the global academic community to showcase rigorous and relevant research within financial planning and related disciplines that directly or indirectly relates to the global financial planning practice and the body of knowledge. The CFP Board Center for Financial Planning hosts the colloquium in collaboration with FP Canada and the Financial Planning Standards Board Ltd., owner of the international CERTIFIED FINANCIAL PLANNER certification program outside the United States.

The colloquium is made possible with support from the Center’s Lead Founding Sponsor, TD Ameritrade Institutional, and Founding Sponsors Northwestern Mutual, Envestnet and Charles Schwab Foundation, in partnership with Schwab Advisor Services.

 

SOURCE Certified Financial Planner Board of Standards, Inc.

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