Chair of Financial Management


Prof. Dr. Bernhard Schwetzler


Overview

Chair of Financial Management

Academic Group

Finance, Accounting and Corporate Governance

Chairholder

Professor Dr. Bernhard Schwetzler

Team Assistant

Alexandra Holzhey

Research Associates

Benjamin Hammer, Heiko Hinrichs, Maximilian Schreiter

Courses (Selection)

Corporate Finance
Corporate Valuation
Financial Management
International Finance
Risk Management

Research Areas

Corporate Valuation
Private Equity
Mergers & Acquisitions
Corporate Finance
Fairness Opinions

Network

Center for Corporate Transactions
Center for Corporate Governance
View e.V.
Value Trust
The Boston Consulting Group
Henkel
Noerr

News
12/08/2016 2016 HHL Research Award for Private Equity Researcher During the 2016 HHL Forum, Benjamin Hammer, 28, received the HHL Research Award, which includes EUR 500 in prize money. Read ›
12/07/2016 top Rethinking Leadership: The Leipzig Leadership Model Compass in turbulent times Read ›
07/14/2016 New Indian Professor with Entrepreneurial Finance Focus at HHL Prof. Shailendra Kumar Rai, Ph.D., is the new Holder of the ICCR Chair of Corporate Responsibility & Governance at HHL. Read ›

Profile

The Chair of Financial Management strives to combine theoretical foundations with application oriented elements in its teaching. We prepare our students for a challenging career in an international setting. Therefore, fundamental theoretical models are taught and applied upon relevant questions and examples.

Research at the Chair of Financial Management is mainly conducted by means of dissertations and third-party funded research projects as well as by selected student theses. The overall objective is to perform theoretical research with a potential to solve current problems in real situations. In order to connect our research with practice, the Center for Corporate Transactions was founded as an integrated part of our Chair in 2007.

Courses

The Chair of Financial Management contributes with its courses to all HHL programs: We offer core and elective modules for the part-time and full-time M.Sc. and MBA programs as well as for the GEMBA program, respectively. Our interactive lectures and seminars offer an overview of modern financial theory with its assumptions, restrictions and implications consistent with current research.

We emphasize the importance of theoretical concepts for real managerial decision making. In particular, students have to apply their knowledge and their competences in case studies. Finally, guest lecturers regularly discuss their practical experiences in the areas of M&A, Corporate Valuations and Corporate Finance in our courses.

Course List

  • Finance (full-time and part-time M.Sc. programs)
  • Corporate Finance (full-time M.Sc. program)
  • Corporate Valuation (full-time and part-time M.Sc. programs, full-time and part-time MBA programs)
  • Risk Management (full-time M.Sc. program)
  • Seminar in Finance (full-time M.Sc. program)
  • Corporate Finance/Risk Management (part-time M.Sc. program)
  • Financial Management (full-time and part-time MBA programs)
  • International Finance (full-time and part-time MBA programs)

Our Guests: Venture Stars, Rocket Internet, Acton Capital, PWC und BCG

Our courses regularly offer room for guest lecturers presenting specific financial topics from real life so that students see how their theoretical knowledge will be applied in practice.

Within this framework, we welcomed two very different people in the “Seminar in Finance” in December 2016: First, Erik Pfannmöller, HHL alumnus and 2007 Canoe Slalom World Champion, reported on his experiences as a founder (mysportsworld.com and fredknows.it) and a venture partner (VentureStars) supporting and investing in innovative online concepts with the aim to provide market-leading companies. Then, C. Bernt Sannwald, CEO of Sannwald & Cie. GmbH, discussed risks and chances of valuation standards vs. real world pricing in M&A transactions.

In summer 2016 Dr. Marco Sperling, Global Venture Development Director/ Interim Venture Managing Director at Rocket Internet, who pursued his PhD at HHL under Prof. Dr. Schwetzler’s supervision gave a talk on “Hard Things about Entrepreneurial Finance”. He provided insight on the globalization of business models, the difference between venture capitalists vs. incubators, as well as trends and common pitfalls in venture financing.

Within this framework, Dr. Tobias Stork-Wersborg, HHL-Alumnus and Manager Valuation & Strategy, as well as Dr. Steve Janner from the Advisory Transactions-Team of PricewaterhouseCoopers AG in Hamburg gave a talk on “The Valuation of Intangible Assets” on December 18, 2015, which is always problematic in practice.

Already on December 4, 2015, Dr. Axel Jansen, Principal at The Boston Consulting Group Hamburg, gave a comprehensive overview of the PE market entitled “PE fund strategies: trends and perspectives”. Moreover, he explained six main trends identified by BCG, which could help PE firms to successfully establish on the PE market.

Fritz Oidtmann, Managing Partner at Acton Capital Partners Munich, held a guest lecture on “Challenges for Growth Companies: About Chances, Temptations and Sweet Poison” in our MSc course “Seminar in Finance” on June 25, 2015. Analyzing not only the challenges growing companies have to face in general but also venture capitalists in particular he explained why an IPO is not always advantageous in growth situations.

Research

Research at the Chair of Financial Management rests mainly on three pillars: dissertations, third-party funded research projects and selected master theses. 

The overall objective is to perform theoretical and empirical research with precise links to current problems. In order to combine our research with practice, the Center for Corporate Transactions was founded as an integrated part of the Chair in 2007.

Our research is focused on:

  • Corporate Finance (optimal capital structure, risk of default,  diversification, conglomerate discount)
  • Private Equity (PE business model, M&A activity under PE ownership, fund characteristics)
  • Corporate Valuation (dynamic structural models, tax shield and special topics in valuation practice, multiple quality)
  • Corporate Governance (ownership structure)
  • Mergers & Acquisitions (fairness opinions, MACs, serial acquirers, synergies)

We have published our research in leading academic journals such as the Journal of Banking & Finance, Journal of Corporate Finance, Journal of Business Economics and International Review of Law and Economics.

Additionally, we regularly discuss our results in practice-oriented journals such as the CORPORATE FINANCE, Die Wirtschaftsprüfung (WPg) and Zeitschrift für Recht und Rechnungswesen (RWZ).

Depending on the topic, working on a research project or a thesis goes along with individual supervision by Professor Schwetzler or other mentors. We also discuss our research frequently at academic conferences and chair colloquia with all current doctoral students and alumni. In sum, we aim at connecting our doctoral students with project partners and alumni to share feedback and interchange ideas.

Current Research: Dynamic Structural Models and Leveraged Byouts (LBOs)

We develop a model that allows evaluating the financial effects of leveraged buyouts (LBOs) from the perspective of the investor. We provide explicit form solutions for all payoffs from acquisition to exit and therefore feature the determination of net present value (NPV) and internal rate of return (IRR). The model is based on a boundary crossing approach where the default of the target firm is represented as a lower piecewise linear barrier. Those default barriers either consist of debt repayment and interest expenses or are contractually-fixed by covenants like debt-to-EBITDA. Our approach features the typical LBO debt repayment schedules: fixed and cash sweep. Furthermore, the model captures all drivers of performance and leverage identified by empirical studies: firm-specific ones like profitability, cash flow growth, volatility, and liquidation value as well as external ones like credit risk spreads and pricing discounts for debt overhang. We optimize the LBO financing structure for NPV and IRR maximization, and find arguments beyond the classic discussion of the investment criteria: Maximizing the IRR leads to higher leverage, increased default risk and a substantial loss in present value.

Current Research: Private Equity

We use the Chair’s rich dataset to investigate the topic of default probabilities of Private Equity (PE) portfolio companies. Although existing research is limited to the mere comparison of the default probability of PE versus non-PE backed firms, we analyse the way different PE firm and deal characteristics affect default probability.

This topic has become increasingly relevant in the recent “boom” years of the PE industry, because there were many more new market entrants with heterogeneous ways of operating PE firms. It has therefore become difficult for institutional investors to judge which PE firms jeopardize their capital.

The results indicate that specialization of PE firms significantly reduces the default probability of portfolio companies, but only if they operate within the PE firm’s target industry, market or segment. Otherwise, portfolio companies of specialized PE firms exhibit significantly higher default probability than those of generalist PE firms.

Publications of the Chair of Financial Management

Current Research: Conglomerate Discount

For a long time scientists have been studying the so-called “conglomerate discount”, the phenomenon of a lower market valuation of conglomerates due to their diversification. However, interesting questions remain in this field. The availability of an up to date, global data sample helps Christin Rudolph to comprehensively review this issue and to make regional comparisons. Additionally, new research questions arise against the backdrop of the 2008/2009 financial crisis, including the short term and long term consequences of such a credit crisis on the internal capital allocation of conglomerates and on the conglomerate discount.
Furthermore, Christin Rudolph does research on the variety of causes of the discount. Recently, research was done on the influence of principal agent conflicts on the discount in collaboration with Markus Brendel and Professor Schwetzler. In the context of this project, the Oaxaca-Blinder decomposition, originally established in the field of labor economics, was presented as an insightful alternative to the established estimation method.

Publications of the Chair of Financial Management

Awards and Honors

Maximilian Schreiter received the 2017 AFA Student Travel Grant allowing him to attend the 77th Annual Meeting of the American Finance Association in Chicago, USA, on January 6-8 2017.

HHL Annual Research Award 2016 (EUR 500) for Benjamin Hammer for the excellent academic performance level of his papers and conference presentations.

Best Paper Award (Corporate Debt) presented to Maximilian Schreiter for the paper “Modeling Dynamic Redemption and Default Risk for LBO Evaluation: A Boundary Crossing Approach” by Maximilian Schreiter, Alexander Lahmann and Bernhard Schwetzler, presented at the 3rd Young Finance Scholars’ Conference, Brighton, UK, June 9-10, 2016.

Benjamin Hammer received the 2016 AFA Student Travel Grant allowing him to attend the 76th Annual Meeting of the American Finance Association in San Francisco, USA, on January 3-5 2016. 

The 2015 Beta Gamma Sigma Scholarship, jointly funded by the Beta Gamma Sigma Chapter at HHL and the Friends of HHL, to Benjamin Hammer for his outstanding grades in the doctoral program and the exceptional quality of his research.

EFMA (European Financial Management Association) 2015 Larry Lang Corporate Finance Best Paper Award (USD 2,000) for the working paper “Exit through Exitus in Private Equity Buyouts” by Benjamin Hammer, Robert Loos and Bernhard Schwetzler, presented at the EFMA 2015 Annual Meetings, June 24-27, 2015 in Amsterdam, The Netherlands.

Acceptance at Research School "Stochastic processes and applications 2015" of CIMPA, DAAD and Bernoulli Society in Ulaanbaatar, Mongolia (Maximilian Schreiter)

HHL Annual Research Award 2013 and 2014 (EUR 500 resp.) for Dr. Christin Rudolph for the excellent academic performance level of her papers and conference presentations.

Leonardo & Co. Award 2012 for the best master and bachelor thesis on mergers & acquisitions (M&A) (EUR 4,000) for Susanne Knoll’s master thesis on the “Influence of MAC Clauses on Offer Premia and Cumulative Abnormal Return” supervised by Professor Bernhard Schwetzler and Junior Professor Alexander Lahmann.

Successful Dissertations 2014-2017

Overview of doctoral theses at HHL 

External Doctoral Students and Their Projects

  • Hannes Kaltenbrunner:
    Does consistency improve the multiple quality? – The German case (publication-based dissertation
  • Nils Janssen:
    Do Private Equity Funds Pay for Synergies (publication-based dissertation)
  • Nils Härtel:
    Effects of Style Drift in Private Equity (publication-based dissertation)
  • Julian Kaboth:
    Analyses of the economic impact of contractual terms and design in share purchase agreements (publication-based dissertation)

Finanz-Forum Alpbach 2016

On October 13-16, 2016, the Chair of Financial Management held its triennial finance conference Finanzforum Alpbach in Alpbach, Tyrol. This year’s Finanzforum focused on current research as well as discussions about future projects of the chair. It was attended by our research associates, external doctoral students, and alumni.

Our doctoral students discussed their current research results as well as their recent papers. Topics of discussion included the impact of buy-and-build strategies on private equity holding periods (Benjamin Hammer), buy-and-build strategies as well as multiple expansion under private equity (Heiko Hinrichs), optimal capital structure choice (Maximilian Schreiter) and advanced issues in corporate valuation (Julian Kaboth).

On the second day of the conference, many of the Chair’s alumni joined the forum, giving the current doctoral students the opportunity to reflect on practical applications for their work and providing a unique opportunity to become part of the Chair’s close alumni network. Two speakers sparked fruitful discussions with their talks: Dr. Sven Arnold shared insights from his work in EY’s valuation department and Dr. Marco Sperling, who is Growth Partner at 7Commerce, shared his view on recent developments in entrepreneurial finance.

Subsequent to the academic program the participants joined some extensive mountain hikes in the picturesque location of the Austrian Alps strengthening not only their personal network but also their physical performance.

We are looking forward to the next Finanzforum already in 2018.

The Chair’s Doctoral Colloquium

The Chair of Financial Management organizes colloquia for its doctoral candidates in Leipzig at more or less regular intervals in order to give them feedback to their research activities between the usually triennial meetings at the Finanzforum Alpbach.

Within this smaller kind of colloquium doctoral candidates present their research topics to the team of the chair discussing theories, methods and results. These doctoral colloquia ensure a high level of quality within HHL's research network and facilitate the exchange of ideas and knowledge between external and internal doctoral students. Consequently, they help to increase the chances to get a scientific working paper accepted at an internationally renowned conference.

The next Chair’s Doctoral Colloquium will take place in summer 2017.

Center

Center for Corporate Transactions and Private Equity

Facing the growing importance and complexity of corporate transactions the Center for Corporate Transactions and Private Equity (CCTPE) was created in 2007 as an integral part of the Chair of Financial Management.  

Together with the chairholders of HHL’s Chairs of Accounting, Auditing and Controlling, Professor Dr. Henning Zülch, and of Economics and Information Systems, Professor Dr. Pierfrancesco La Mura, our Chair combines the expertise of the most prominent research areas regarding corporate transactions. Our objective is to analyze and discuss problems of corporate valuation from different perspectives in order to discover new research perspectives and to generate innovative solutions for the business world.  

We cooperate with external research partners, such as ValueTrust Financial Advisors SE, the German Private Equity and Venture Capital Association (BVK) e.V., Deutsche Vereinigung für Finanzanalyse und Asset Management (DVFA) e.V., European Association of Consultants, Valuators and Analysts (EACVA), Henkel AG & Co. KGaA, The Boston Consulting Group GmbH, and Noerr LLP.  

Carsten Knobel, Executive Vice President and CFO Finance, Purchasing & Integrated Business Solutions at Henkel AG & Co. KGaA on our collaboration: “We at Henkel appreciate the Chair´s unique combination of academic and practical relevance.” Our new partner Prof. Dr. Christian Aders, Chairman of the Executive Board of ValueTrust Financial Advisors SE, adds: "The cooperation between the Center for Corporate Transactions and Private Equity at HHL and ValueTrust has been productive right from the start as both parties could build on the experience gained in preceding projects." 

Knowledge Transfer

Besides excellent academic research and high quality teaching we emphasize a lively exchange with practice, working with cooperation partners from both the academic and the business world. In this context, we focus on transferring knowledge and current results of our academic research as well as on the transfer of methodological competence. International conferences allow the members of our Chair to present and discuss their research and to gain ideas for innovative research projects.

In order to highlight the importance of our research and syllabus for practice, we periodically organize projects with prestigious cooperation partners. This background allows for an intensive interaction of both realistic decision situations from the business world and the results of academic research. Beyond this, public events such as the HHL Forum permit a regular exchange with high-level decision makers from both politics and the business world.

Peer-Reviewed Paper Presentations

Do Buy and Build Strategies Increase Illiquidity of Private Equity Investments? (B. Hammer)
European Financial Management Association (EFMA) 2017 Annual Meetings, Athens, Greece, June 28 – July 1, 2017
2017 FMA (Financial Management Association) Annual Meeting, Boston, MA, USA, October 11-14, 2017

Illiquidity and Indebtedness – Optimal Capital Structure under Realistic Default Triggers in a Double Barrier Option Framework (T. Kutzker, A. Lahmann, M. Schreiter)
79th Annual Meeting of the VHB, St Gallen, Switzerland, June 7-9, 2017
European Financial Management Association (EFMA) 2017 Annual Meetings, Athens, Greece, June 28 –July 1, 2017

Does Culture Affect Exit Channel Choice and Operating Performance in Private Equity Buyouts? (B. Hammer, H. Hinrichs, B. Schwetzler)
2017 FMA (Financial Management Association) European Conference, Lisbon, Portugal, June 22-23, 2017
15th INFINITI Conference on International Finance, , València, Spain, June 12-13, 2017

Buy and Build Strategies in Private Equity: Boost or Transformation? (B. Hammer, H. Hinrichs, D. Schweizer)
2017 FMA (Financial Management Association) Annual Meeting, Boston, MA, USA, October 11-14, 2017
2nd Entrepreneurial Finance Conference, Ghent, Belgium, July 6-7, 2017
EFA (Eastern Finance Association) 2017 Annual Meeting, Jacksonville, FL, USA, April 5-8, 2017

Corporate Financing Policy, Debt Redemption and Default in Leveraged Buyouts (A. Lahmann, M. Schreiter, B. Schwetzler)
Real Options 20th Annual International Conference, Oslo & Trondheim, Norway, June 15-18, 2016

Fueling the Buyout Machine – Fundraising in Private Equity (R. Loos, B. Schwetzler)
78th Annual Meeting of the VHB (German Academic Association for Business Research), Munich, Germany, May 18-20, 2016
Midwest Finance Association (MFA) Annual Meeting 2016, Atlanta, USA, March 2-5, 2016
Paris Financial Management Conference (PFMC-2015), Paris, France, December 14-15, 2015

Modelling Dynamic Redemption and Default Risk for LBO Evaluation: A Boundary Crossing Approach (A. Lahmann, M. Schreiter, B. Schwetzler)
Real Options 19th Annual International Conference, Athens, Greece, June 17-20, 2015
Annual Meeting of the Asian Finance Association (AsianFA), Changsha, Hunan, China, June 29- July 2, 2015.

Exit through Exitus in Private Equity Buyouts (B. Hammer, R. Loos, B. Schwetzler)
European Financial Management Association (EFMA) 2015 Annual Meetings, Amsterdam, The Netherlands, June 24-27, 2015
Southern Finance Association (SFA) Annual Meetings, Captiva Island, USA, November 18-21, 2015
Financial Management Association (FMA) Annual Meeting, Orlando, USA, October 14-17, 2015
22nd Annual Meeting of the German Finance Association (DGF), Leipzig, Germany, September 25-26, 2015

The Paradoxon of Policy Intervention: The Case of the German Tax Reduction Act (M. Brendel, B. Schwetzler, C. Strenger)
Eastern Finance Association (EFA) Annual Meetings, New Orleans, LA, USA, April 8-11, 2015

Latest Invited Talks

Schwetzler, B.
Die Bewertung von innovativen Geschäftsideen und –modellen, 15th Jahresforum Unternehmensbewertung of the Handelsblatt Fachmedien GmbH, Frankfurt am Main, Germany, June 29-30, 2017

Schwetzler, B.
Unternehmenswert und hybride Finanzierung, Wiener Bilanzrechtstage 2017, Vienna, Austria, April 21-22, 2017

Schwetzler, B.
Globale Aspekte der Bankbewertung: Zinsstruktur, Fristentransformation und Unternehmenswert, 14th Jahresforum Unternehmensbewertung of the Handelsblatt Fachmedien GmbH, Frankfurt am Main, Germany, June 30 – July 1, 2016

Schwetzler, B.
Success Factors in Private Equity: Research @ HHL, Messekongress „Finanzen & Risikomanagement“ of the Versicherungsforen Leipzig GmbH, Leipzig, Germany, June 8-9, 2016

Schwetzler, B.
Die Bewertung innovativer Geschäftsmodelle, 78th Annual Meeting of the VHB, Munich, Germany, May 18-20, 2016

Hammer, B.
Angewandte Private Equity Forschung an der HHL Leipzig Graduate School of Management mit Hilfe von Bureau van Dijk Zephyr und Orbis, Bureau van Dijk Academic Day, Frankfurt am Main, Germany, April 21, 2016

Hammer, B.; Loos, R.; Schwetzler, B.
Exit through Exitus in Private Equity Buyouts
European Midmarket Conference 2015, Amsterdam, The Netherlands, October 23, 2015

Schwetzler, B.
Unternehmensbewertung und Insolvenz
9th Annual Conference of the EACVA (European Association of Certified Valuators and Analysts), Berlin, Germany, November 26-27, 2015

Schwetzler, B.
Unternehmensbewertung von Banken
13th Jahresforum Unternehmensbewertung of the Handelsblatt Fachmedien GmbH, Frankfurt am Main, Germany, July 2-3, 2015

Media Coverage

According to the new report by The Boston Consulting Group (BCG) and our chair private equity firms that have greater experience investing in software companies capture higher returns than those that invest in such companies opportunistically. What sets the more experienced investors apart is their superior understanding of how to create value in the software industry. The report, titled “Cracking the Code in Private Equity Software Deals”, is being released at BCGperspectives.com on May 17, 2017.

The influential German investor journal VentureCapital Magazin discussed the main results of our research in the field of Buy-and-Build-Strategies and the question how these strategies influence the outcome and the holding time of private equity investments.
 “Buy and Build-Strategien als Werttreiber”, in: VentureCapital Magazin, 4 (2017), p.42f.

The website www.PrivateEquityInternational.com, the only global publication site with a primary focus on the relationship between investors and fund managers in private equity, reviewed our latest research report we published together with The Boston Consulting Group (BCG) in February 2016.
The report called “The Power of Buy and Build. How Private Equity Firms fuel Next-level Value Creation” is available at BCGperspectives.com.

Student Consulting Project 2015: Our chair set up the cooperation with the Berufsbildungswerk Leipzig, a local vocational training center, for five M.Sc. students to prepare a business concept for the Philippus project. By the end of 2016, the city's first integration hotel as well as the former church hall of the Church of St. Philippus serving then as a restaurant and event location within the framework of an integration business will open their gates.
See „Wirtschaftskonzept fürs Integrationshotel“, in: Leipziger Volkszeitung, June 26, 2015, p. 17 and „Kontrolliert verrückt. Die Phillipus-Kirche in Lindenau erlebt ihren zweiten Frühling”, in: Leipziger Zeitung, July 10, 2015, p. 10.

Team

Prof. Dr. Bernhard Schwetzler
Chairholder | Academic Director
MBA Programs
T +49 341 9851-686
F +49 341 9851-689
bernhard.schwetzler(at)hhl.de
Dipl.-Kffr. Alexandra Holzhey, M.A.
Team Assistant
T +49 341 9851-685
F +49 341 9851-689
alexandra.holzhey(at)hhl.de
Dr. Benjamin Hammer
Assistant Professor
T +49 341 9851-652
F +49 341 9851-689
benjamin.hammer(at)hhl.de
Heiko Hinrichs, M.Sc.
Research Associate
T +49 341 9851-688
F +49 341 9851-689
heiko.hinrichs(at)hhl.de
Maximilian Schreiter, M.Sc.
Research Associate
T +49 341 9851-690
F +49 341 9851-689
maximilian.schreiter(at)hhl.de
Entrepreneurship & Technology Transfer
Innovation Management & Entrepreneurship

Accreditation & Rankings

Among the leading EMBA
programs worldwide

Top 5 in Germany

Most International University
in Germany

#1 for Entrepreneurship
in Germany

Favorite Business School
in Germany