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By Pierre Ciret, Economist Edmond de Rothschild Asset Management
Since the beginning of the financial crisis, European companies have embarked on a structural transformation of their sources of funding. In terms of scale, the primary source remains internal, i.e. own capital and annual cash-flows. Despite the return to corporate profitability, investor wariness towards equities still remains and stock-market trends have translated into a reduction in new public offerings and new share issues which have fallen to very low levels (ten public offerings in France this year). Besides equity capital, for two-thirds of companies debt-funding was reliant on bank facilities while only one third found sources of funding on capital markets.
The European...
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