Message from AIF Chairman
We help you understand and respond to the current financial turmoil
Be Prepared for New Opportunities
There a several signs recently that life is returning to the mergers and acquisitions market. Share prices, though off their lows seems cheap by historic standards – ideal conditions for a new merger wave to form. Learn how to capitalize on new market opportunities with AIF’s Mergers and Acquisitions and Acquisition Finance programs. AIF’s Advanced Valuation programs offered in Amsterdam and in Abu Dhabi gives special attention to value assessment in M&A.
Risk Management in the Spotlight
Launch of the first Executive Master of Science in Risk Management at AIF in cooperation with NYU Stern
AIF and NYU Stern School of Business were proud to launch the first Executive Master of Science in Risk Management on April 1, 2009 in Amsterdam with a class of 25 senior executives representing 16 nationalities. The participants will attend 10 modules which are being held in Amsterdam and New York City to achieve the NYU Stern degree. 65% of the participants have a Master, MBA or PhD degree, and are in positions such as CEO, CRO, Head of Market Risk and Director Insurance and Risk.
 Special guest speakers at the event were Dr. Onno Ruding, Prof. Theo Vermaelen and Prof. Ingo Walter (see right). Theo Vermaelen, Professor at INSEAD and Program Director at AIF introduced the program, followed by Dr. Onno Ruding, who talked about ‘Risk Monitoring and Management within Financial Institutions’. After this, Professor Ingo Walter, Vice Dean of NYU Stern, gave his views on how to ‘Restore Financial Stability’. The evening ended with drinks and canapés to allow the participants to get to know each other before starting the first module on April 2.
Risk Management Programs at AIF
Financial Risk Management on June 15 – 19, provides the participant with the essential principles and tools necessary in financial risk management.
Risk Management in the Fund Management Industry on June 25 – 26, focuses on the theoretical concepts behind risk analytics and their practical use in the fund management industry.
Risk Management in the Commodity and Energy Markets on August 31 – September 2, gives insight into how to develop risk management strategies that yield the highest hedging effectiveness e.g. risk reduction.
Asset and Liability Management on November 2 – 6, focuses on portfolio and balance sheet risk management.
Financial Risk Control (8 modules of 3 days each) started last January and provides in-depth education on bridging the gap between risk management and financial control. The next offering will start in January 2010.
AIF Professors Consider if a Buyback Portfolio Could be a Good Investment
Buyback Investing: Time to Come in From the “Cold”?
Theo Vermaelen, INSEAD and AIF Program Director and
Urs Peyer, INSEAD and AIF Professor
Many investors are wondering: is it time to take the plunge and go back into stocks? While no-one can predict the future, it is generally accepted that company insiders know more than outsiders. So, one way to check whether insiders have confidence is to check net insider buying data (insider purchases minus insider sales). However, such a signal is likely to be noisy as in many cases insider sales are driven by personal reasons such as e.g., the need to sell stocks to finance consumption or to pay off debt.
An alternative way to examine insider confidence is to look at share buybacks. Academic surveys show that the main reason for repurchasing stock is “undervaluation”: firms believe that the market is overly pessimistic about the company’s prospects. The most recent evidence of market timing is reported in our paper “The nature and persistence of buyback anomalies” published in the Review of Financial Studies, April 2009. In this paper we show that a strategy that invests in companies that announce repurchase programs motivated by undervaluation, outperform risk-adjusted benchmarks by 50 % after 3 years. The probability that a buyback is driven by undervaluation is measured by an undervaluation index. This index is based on the stated motivation in the press release, market-to-book ratios, past price behaviour and market capitalization.
Why has such a free lunch existed for 25 years? Our research shows that the anomaly is a result of the short-termism of the analyst community. Although the value of a company is the present value of cash flows from now until infinity, analysts pay excessive attention to short-term performance; perhaps as a result of simplistic valuation methods such as valuation based on earnings multiples. As managers have a long term perspective, they are better able to take advantage of mistakes induced by short-termism, at least on average. Read article
Global Programs in Partnership with CFA Institute
In partnership with the CFA Institute, AIF offered successfully its Advanced Valuation and Mergers and Acquisitions programs in Abu Dhabi and Dubai respectively. Upcoming programs with the CFA Institute are Advanced Corporate Valuation in London on June 10 – 12 and Johannesburg on August 17 – 19 and Acquisition Finance in Singapore on September 7 – 9. CFA members will receive a special rate for these programs (see www.aif.nl).
Update on Company-Specific Programs: Managing Crisis at Work
Besides training in finance, a number of AIF clients request programs on business skills to complement their training package. AIF for example offers a two-day training specifically focused on managing uncertainties, emotions and dilemmas within teams, caused by the current financial and economic crisis. This hands-on program is targeted at managers who are often not involved in corporate strategy and who have little influence on the decisions taken at the highest level. For more information on this program or other training solutions for your company, please contact Susan Forrest at s.forrest@aif.nl or + 31 205200178.
Gaining the Essential Financial Knowledge
Many managers are now realizing the importance of understanding the financial essentials, and the program Foundations of Finance is in high demand. The next offering will take place on June 18 – July 3. It is complemented by the programs Advanced Financial Statement Analysis on September 21 – 25, and Essentials of Accounting on September 28 – 30. Other programs addressing the essentials of finance are available for Lawyers on October 5 – 10, Investor Relations on November 10 – 12, Non-Financial Executives on November 16 – 17 and Engineers and Other Technical Professionals on December 2 – 4.
Financial Restructuring
Many companies are asking for help on how to return to profitability and how to refinance their operations. A number of AIF programs address this issue:
Private Equity: Restructuring Assets and Liabilities on June 5 – 6, furthers knowledge into asset restructuring and funding changes needed to survive and thrive in the current credit market.
Anticipating and Managing Financial Distress on September 28 – 30, assists in helping evaluate companies in financial trouble and negotiate a workout.
Macro Economics and Global Financial Markets, October 12 – 14, helps understand the fundamental macroeconomic factors that influence global financial markets as well as the operations of non-financial firms.
Corporate Financial Restructuring on October 15 – 17, focuses on adapting the company's financial structure to current market conditions.
Hybrid Equity and Mezzanine Finance on October 26 – 28, deepens knowledge on instruments for subordinated capital financing and financial restructuring.
Acquisition Finance on November 18 – 20, strengthens your ability to assess a proposal for acquisition finance quickly and insightfully in a difficult market.
Impact of Human Behavior on the Numbers
How does human behavior impact the stock markets and financial decision making? In light of the current financial crisis and unexpected moves in the stock markets, the two programs Behavioral Finance on June 8 – 10 and Behavioral Corporate Finance on June 11 – 12, are attracting attention.
The program Negotiation Dynamics on November 10 – 12, furthers the skills in negotiations, understanding what the other party is looking for and how to close the deal.
All AIF professors update their programs continuously to help you address the financial issues which you will be facing. We look forward to welcoming you at AIF and helping you progress in your field.
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