Investment Creation Research Articles

FINANCIAL AND ECONOMIC PROSPECTS FOR CREATING GREEN ENERGY PROJECTS IN THE UKRAINE-POLAND COLLABORATION

This paper examines the economic and financial advantages of improving international collaboration between Ukraine and Poland in the development of alternative energy projects. It conducts a thorough evaluation of existing and forthcoming renewable energy generation technologies, using expert, Delphi, and methods based on statistics to identify the most promising and universally applicable solutions. The calculation of the payback period for small-scale green energy projects pays particular attention to the actual duration of the period in the case of small business ventures. The findings are summarized with a vision for the future Ukrainian-Polish cooperation in the scope of green energy cooperation and specific instruments and processes that could contribute to the success of the collaboration.The article outlines the potential approach that involves the isolation of the cooperation between Ukraine and Poland in green energy relying on the creation of investment and venture funds, public support for the manufacturing of a renewable energy component, and the establishment of non-volatile industrial complexes. Additionally, measures such as independent small alternative power plants and the initiatives for the development of the Ukrainian-Polish joint network of alternative energy are mentioned.The current war between Ukraine and Russia has drawn attention to the crucial need for energy security and diversification, making Ukraine-Poland collaboration on green energy projects all the more important. Ukraine may minimize its reliance on the Russian energy supply by focusing on renewable energy programs, while Poland can invest in sustainable energy to boost regional stability and economic progress. The article points out that the continuation and advancement of green energy initiatives require international cooperation. The paper offers detailed guidance on how the financial, economic, and technological opportunities and relations between Ukraine and Poland may be enhanced.

Investment Portfolio with Convex Optimization and Risk Adjustment Using Multi-Factor Model and Multi-Armed Bandit Algorithm

This paper examines the creation of investment portfolios through convex optimization, multifactor models, and the multi-armed bandit (MAB) algorithms, focusing on the KL-UCB strategy to optimize decisions in uncertain settings. It explores the impact of systematic risk factors using the Fama-French three-factor model, estimating the influence of market, size, and value premiums via linear regression. The use of Monte Carlo simulation is detailed for generating potential asset allocations and calculating their expected returns, volatility, and Sharpe ratios. The optimize minimize function from the SciPy library is employed to construct an efficient frontier and determine optimal asset allocation, aiming to maximize returns or minimize volatility across various risk levels. The findings suggest that the strategy of dynamic weight adjustments combined with the KL-UCB algorithm enhances portfolio returns, particularly during market volatility. The research also reveals a portfolio inclination towards large-cap growth stocks due to the negative impacts of size and value premiums. It concludes that dynamic weight adjustment strategies offer significant potential in optimizing portfolio performance in complex market conditions, though leveraging increases risk and should be carefully managed according to investor risk tolerance.

SUSTAINABLE DEVELOPMENT: A VIABLE SOLUTION TO REDUCE POVERTY

Poverty is one of the world’s greatest economic and social problems of all time. Therefore, sustainable solutions to reduce it are essential to increase the well-being of individuals and society. In this paper, the various causes of poverty, such as social and economic inequalities, limited access to education and health, will be analysed. After an introduction, the concept of sustainable development will be presented, underlying the virtues, as well as limits of it. There will be explored sustainable solutions for poverty reduction, which focus on sustainable development and the promotion of social and economic inclusion. Such solutions could be the creation of jobs and investment in the agricultural sector, the development of infrastructure and public services, the promotion of access to education and health services, and support for local communities and the social and solidarity economy. To validate these findings, qualitative methodology based on content analysis of sustainable development literature will allow to identify and evaluate good practices in sustainable development and poverty reduction. Therefore, it will be possible to show that sustainable solutions for poverty reduction are not only feasible but also effective in terms of social and economic impact. The paper will end with conclusions, arguing that sustainable solutions to poverty reduction are the key to increasing the well-being of individuals and society, and showing that interconnectivity, when considered in a sustainable approach, can improve the benefits for economic and social life.

DAMPAK PELAKSANAAN ACFTA (ASEAN-CHINA FREE TRADE AGREEMENT) PADA FDI EKTRA-REGIONAL DI INDONESIA

The era of globalization encourages countries to integrate with other countries to fulfil domestic needs at lower prices and encourages the export of domestic products. When the countries conclude the Economic integration, besides of effect of the increment in international trade, there is also the effect of increasing FDI inflows which are called investment creation, which is the increment of FDI from extra-regional countries. Since Indonesia ratified ACFTA and the tariff between Indonesia and China became 0 tariffs in 2010, it raises questions about whether Indonesia had the investment creation from economic integration with China and what factors have influenced FDI flows in Indonesia since the ACFTA. This study attempts to answer this question using descriptive analysis and an econometric approach. The econometric approach in this study uses the gravity method by including panel data from 91 countries over a period of 13 years. The econometric approach gives the result that extra-regional countries have a significant negative effect on FDI inflows in Indonesia which makes Indonesia still needs to implement policies to attract FDI inflows from extra-regional.

Роль страхування у забезпеченні соціально-економічної безпеки регіонів у контексті сталого розвитку

Abstract. Introduction. At the current stage of development for regional economies, the problem of not only overcoming the consequences of crisis phenomena that increase the uncertainty and risk of business activity and life of the population, but also their prevention is becoming more and more relevant. Accordingly, insurance is starting to play an increasingly important role in the redistribution of risks in the regional economic system, creating conditions for strengthening the stability of households and businesses, as well as ensuring the socio-economic security of regions in general. The latter in the context of sustainable development acquires special importance, because it allows to establish a balance between the satisfaction of modern needs of humanity and the protection of the interests of future generations through the satisfaction of the need for insurance protection. Purpose. The purpose of the article is to justify the content and role of insurance in ensuring regional socio-economic security in the context of sustainable development. Results. In the article the emergence of society's need for insurance protection, which is expressed in three sources of demand from different institutional sectors, is argued. The functions of insurance are identified and structured, with a division into primary (control and distributive) and secondary (risk, creation and use of insurance funds, preventive, savings, investment and compensation). The impact of insurance on structural blocks and components of socio-economic security of regions is considered. Advantages and disadvantages of insurance are defined. The place and task of insurance in ensuring regional socio-economic security in relation to economic growth, social integration and environmental protection, which are the basis for the sustainable development of households and enterprises in the respective territories, are argued and specified. Conclusions. It has been proven, that in the context of sustainable development, insurance aims to ensure the socioeconomic security of regions through risk reduction, development of innovative solutions, improvement of business efficiency and promotion of environmental, social and economic stability.

Application Analysis of Internal Rate of Return Capital Budgeting Method in Project Investment Decision-Making

Capital budgeting is crucial for a company to make the right investment decision. Among the typically used evaluation methods, the net present value and the internal rate of return are the mostly commonly used and preferred. This paper aims to focus on IRR, providing a comprehensive view of IRR that includes its basic characteristic, advantages and disadvantages when using it as the investment creation, as well as the improvements of its modified version MIRR, there will also be a comparison between the NPV and IRR to illustrate their difference. The study could enable the audience a comprehensive understanding of IRR in project appraisal, and whether to choose IRR or NPV as the investment criterion under different circumstances of the project or base on their own preferences. This research can provide more comprehensive and more realistic economic evaluation decision-making information, making the project economic evaluation more scientific.

FOREIGN ECONOMIC ACTIVITY OF UKRAINE: PRE-WAR TRENDS AND CURRENT CHANGES

Introduction. In a globalized world, foreign economic processes have a significant impact on the state of the national economy. The level of integration into global value chains changes the level of development of the business environment and the structure of the economy. The publication analyzes Ukraine's international trade activity in 2018-2021 and its current state. Ukrainian companies ensure integration into global value chains. However, the low degree of processing of export-oriented goods remains a significant problem. The study of current trends in Ukraine's foreign economic activity is relevant for overcoming current challenges and identifying key growth priorities. Purpose. The aim of the article is to study the volume and structure of export-import operations and foreign trade processes of the Ukrainian economy within the framework of global value chains (GVC). Research methods. The article uses the methods of analysis and synthesis, systematization and generalization, abstraction, data presentation, and formal logic. Results. The study confirms the positive dynamics of Ukraine's foreign trade in 2018-2021. Ukrainian companies export mainly low value-added goods and import high value-added goods. The development of Ukraine's economy requires successful integration into global supply chains. This is possible if we move from exporting raw materials to increasing the volume and depth of their processing in the national economy, and further exporting high value-added goods. The study showed that economic relations between Ukraine and its trading partners demonstrate a significant increase in foreign trade within global value chains. Ukrainian companies are involved in the development of global integration processes mainly in sectors that consume agricultural products, metallurgy, and IT-services. Agricultural and industrial products exported from Ukraine account for about 40% of total international sales. Against the backdrop of Russia's full-scale military invasion, a negative trend is the decline in Ukraine's foreign trade turnover by almost 30% (exports by 35% and imports by 25%). The largest decline in exports occurred in the metallurgical and chemical industries. The share of agricultural products in exports increased, while the share of fuel, equipment, and vehicles in imports increased. Conclusion. Foreign economic activity determines the business activity of business entities, their integration into the system of international economic relations, and creates essential preconditions for the transformation of the national economy, improving the living conditions and living standards of the population. Ukrainian exports are dominated by a high share of intermediate goods used as raw materials for the production of other final consumer goods. Therefore, it is advisable to stimulate deep processing of raw materials in the domestic market, the finished products of which can become competitive on the foreign market. With Ukraine's integration into global and regional business services in the context of global value chains, it is possible to ensure positive effects from foreign economic activity. The basis for successful integration into global value chains is to stimulate the development of international cooperation between enterprises on global business platforms, as well as local innovation ecosystems that will facilitate the creation of innovative industries, both through public and private investment. Keywords: global (regional) value chains, foreign economic activity, exports, imports, foreign trade balance, foreign trade, innovations.

The Effect of Government Subsidies on The Teal Activity of Firms: Evidence from Chinese Listed Firms

We examine the effect of subsidies on the real activity of firms using a panel of Chinese listed firms from 2008 to 2013. Employing the Propensity Score Matching method (PSM) and Differences in Differences method (DID), the study showed that government subsidies were not only highly effective at promoting investment and job creation, but they enhanced short-term productive efficiency of firms. Meanwhile, we find that there was significant cross-sectional variation in firms’ response to subsidies, and non-state-owned firms (non-SOEs) benefited more from subsidies than state-owned enterprises (SOEs) in the short term.

The importance of a continuous belief-update mechanism on crowdfunding with financial returns

PurposeThe purpose of this paper is to add to the existing literature about whether and how a continuous belief-update mechanism affects investors' risk perceptions in crowdfunding. The authors build on existing literature on the impact of a continuous belief-update mechanism on return expectations and risk perceptions, as a result of the funders' personal return and risk experiences, and apply this approach to the crowdfunding area. The authors thus add two specific insights about these dynamic new markets. First, the authors measure the perceived risk along multiple dimensions. Second, the authors consider how perceived risk differs across experienced investors and inexperienced investors, using two levels of analysis.Design/methodology/approachThe paper uses a unique data set of survey respondents on crowdfunding with financial returns. The data set covers Germany, Poland and Spain. Survey data were derived by market research conducted in two stages. The first stage consists of two questions asked within an omnibus survey conducted by computer-assisted telephone interviews. In the second stage, multiple questions (including QA.1 and QA.2 and demographics) were included in an online survey or computer-assisted web interview for the same three countries.FindingsThe authors find that experienced investors perceive risks at lower levels than users that are aware of crowdfunding, but have not yet had the experience of an actual investment. The authors also find that investors, who invest larger proportions of their savings in crowdfunding with financial returns, perceive risks even lower than “lighter” investors, for the majority of risks the authors investigate.Research limitations/implicationsThe study is limited in three European countries and explores crowdfunding with financial returns only.Practical implicationsThe study suggests that investors' participation and activity in crowdfunding with financial returns can be increased, either via providing incentives for “first investment” or via the creation of investment simulators.Originality/valueThis study contributes to the following three areas. First, the authors shed new evidence on the dynamics of crowdfunding with financial returns and explore how decisions are being made in a context of reverse information asymmetries. Second, the authors explore how the “crowd” reshapes risk perceptions via a belief-update mechanism; this is of high importance under the absence of traditional financial intermediaries, which increases the severity of information asymmetries. Third, the authors enrich literature associated with how laypeople take investment decisions, showing how prior experience affects investment decision making.

Exchange Rate and Capital Flight: An Empirical Analysis

Exchange rate volatility and declining capital inflow are important policy issues that inform macroeconomic policies and strategies of developing countries. Most developing economies have small potential resource base, faces foreign exchange volatility and limited market of agricultural products, thus investigating the role of capital flight is significant for these states. Cognizant of this, the study will try to answer the paradox of capital outflow and exchange uncertainty. The research will investigate the influence of exchange rate differential on capital flight in East Africa economies for the year 1988-2018 using panel secondary data. The empirical analysis was guided by investment creation theorem. The study adopted ordinary least squares estimation to analyse the relation between the study variables. The study estimations has identified that exchange rate positively influences capital outflow in East African states. The positive effect of currency change on capital outflow implied that capital outflow was sensitive to currency depreciation. Accelerated currency devaluation erodes domestic investors confidence to hold local currency, citizens will likely move to foreign markets and assets to avoid negative effect of devaluation. Government policymakers should pursue strategies and policies that can slow currency uncertainty in order to tame capital outflow. These policies and strategies include fostering of both fiscal and monetary disciplines and good governance.

КОНЦЕПТ НАГРОМАДЖЕННЯ КАПІТАЛУ ТА ЕКОНОМІЧНОГО ЗРОСТАННЯ В КЛАСИЧНІЙ ШКОЛІ ПОЛІТИЧНОЇ ЕКОНОМІЇ

The article is devoted to the theoretical review of the main ideas of the classical school of political economy on the content and drivers of economic growth and the possibility of their application in the current economic environment. The main ideas of classical economic theory on the nature and factors of economic growth in terms of fundamental developments of the main representatives of this scientific trend are described in the article. It is established that the representatives of the classical school of political economy firstly provide a meaningful theoretical and methodological explanation of economic categories, laws and processes (production, circulation, accumulation, savings and investment, capital etc.) of economic growth, identifying forces influencing economic growth and social welfare outlining the mechanisms underlying the growth process of various socio-economic formations. It was found that the classics of political economy as a key driver of economic growth considered the accumulation and reproduction of capital, which in turn depends on the creation of savings and investment, proportionality of various forms of capital, institutional environment, scientific and technological progress, public policy, globalization and other factors. It was found that the conceptual theoretical provisions for expanded economic reproduction are an important basis for understanding the determinants and mechanisms of qualitative changes in the economic system, and can be used to consider the possibility of economic growth in modern economic conditions. The acuteness of application of ideas of classical school of political economy to the analysis and substantiation of reasons and levers of economic growth in conditions of modernity is confirmed, in fact, as the example of economic theory shows, classical positions of influence of reproduction of capital on economic growth were successfully adapted for explanation of economic processes in conditions of free and planned economy in conditions of formation of capitalist and socialist economy and other macroeconomic conditions.

MSMEs Issues and Prospectus of Uttarakhand: A Conceptual Investigation with Special Reference to COVID-19

Small and medium businesses are considered to be one of the most important drivers of economic growth in most economies throughout the world. Micro, Small and Medium Enterprises (MSMEs) are considered to be the main drivers of economic growth in India, and the sector fosters a balanced regional growth. The MSME sector plays a vital role in Uttarakhand’s production, investment and job creation. The sector is helping in mitigating the problem of migration and underutilisation of natural resources. This article focuses on analysing the current status and the problems faced by MSMEs in Uttarakhand. The research also examines the state’s MSMEs before and during the COVID-19 pandemic. The sector faces a new set of issues as a result of COVID-19. The study also looks at government support for the business during the COVID-19 pandemic. An extensive literature survey of different research papers, articles and government reports has been done to identify problems and incentives available to MSME units operating in the state. The current incarnation of the MSME sector in Uttarakhand is investigated using descriptive analysis. The article concludes that despite various incentives the MSME sector is facing various challenges in the state which need to be addressed for smooth functioning of the sector.

Efisiensi Wakaf Tunai Dalam Meningkatkan Keuangan Dan Perbankan Syariah

Waqf has long been known by the Muslim community as a form of charity that plays an important role in social, economic and cultural development in order to improve the welfare of the community. One form of waqf that has recently been introduced is cash waqf. Cash waqf as an alternative to poverty alleviation has been implemented in several Islamic countries. In Bangladesh waqf has been managed by Social Investment Bank Ltd (SIBL) which has developed a social capital market in the voluntary sector, cash waqf opens unique opportunities for investment creation in the fields of religion, education and social services. This research is a qualitative research that is literature review. The approach used is descriptive critical analysis. Types and sources of data are secondary data obtained from research results, articles and reference books that discuss the same topic. Waqf is a muamalah activity that has spiritual, social and economic dimensions. Traditionally, so far, waqf has only been interpreted as a gift in the form of immovable property such as land and buildings whose purpose is limited to the construction of houses of worship and education. However, in fact waqf of movable goods such as cash waqf (money) has long been practiced by Muslims such as during the Umayyad and Abbasid dynasties, only not as popular as land or building waqf. Currently, along with the development of public understanding of Islamic philanthropic practices, waqf especially cash waqf is directed towards economic development and empowerment,

International Investment Agreements Provisions and Foreign Direct Investment Flows in the Regional Comprehensive Economic Partnership Region

The international investment agreements (IIAs) are a strategic policy instrument that member countries could use to achieve win-win cooperation. Meanwhile, the extension of the Association of Southeast Asian Nations (ASEAN) membership toward the Regional Comprehensive Economic Partnership (RCEP) membership has induced the rich and deep investment agreement that challenges the ASEAN countries to take advantage. This study demonstrates the effects of investment provisions in international investment agreements on the bilateral foreign direct investment (FDI) in the RCEP economies. It also investigates the effect of ASEAN membership on investment creation and investment diversion toward the RCEP region. Using panel data on RCEP countries during the period 2009 to 2018 and a Driscoll-Kraay standard errors estimator, the results show that the re-lationship between inward FDI and investment provisions in IIAs are positive and significant. Likewise, the investment protection, and promotion provisions in bilateral investment treaties have positive and significant effects on the inward FDI. Moreover, the findings indicate that the ASEAN membership tends to cause the investment creation toward the RCEP region; and it is a stepping stone on the road to the investment policy framework for sustainable development.

Investment providing of jobs creation in agrarian sphere

Topicality. In the economic mechanism of regulation of the labor market in the agrarian sphere is of great importance for forecasting and balancing supply and demand for labor, depending on the volume of agricultural production and the corresponding formation of real investment in job creation in the branch. Therefore, the direction of research of investment processes and employment of the population in the agricultural sphere is relevant. Formulation of the problem. Investment processes in agriculture of Ukraine should provide reproductive processes in the branch, improve the structure of means of production and attract workers to enterprises. At present, there is a rapid reduction in labor force in the agrarian sphere, but there are not enough alternative jobs in the countryside, which increases migration flows in the country. The current urgent task of the state is to create conditions for investing in the creation of jobs in the agrarian sphere to ensure rational employment of the population and food security of the country, etc. The subject of research covers the social and labor aspects of investing in agricultural production. The purpose of the work is to substantiate the directions, terms, volumes and sources of investment in creating jobs in the agricultural sector. Methods of conducting research: abstract-logical, systematic approach, balance, monographic, statistical-economic, economic-mathematical, calculation-constructive methods. Results of the work: quantitative indicators of increase of formal employment of the population in the agrarian and other sectors of the economy and corresponding prognostic scenarios due to activation of investment and reproduction processes in the industry are substantiated; directions, volumes, terms, sources of investment in production of products in agricultural enterprises and improvement of the mechanism of their state support are determined. Practical implementation: formation of investment policy at state, branch and enterprise levels of economy, process of development of state and local programs of promotion of employment of population, agrarian and rural development. Conclusions: activation of investment in labor-intensive production of agricultural products while attracting public and private capital investments in the industry will ensure rational employment of the population in the agrarian sphere, will promote the development of agrarian social and labor relations.

Financial role in supporting the sustainable development goals in ASEAN

Financial sector plays a crucial role in helping a country attaining the Sustainable Development Goals (SDGs) as Financial Means of Implementation (MoI) in the Addis Ababa Action Agenda (AAAA). This report seeks to study sources and uses of fund for the SDGs and evaluate whether the role of the financial sector in ASEAN complies with the AAAA. The study shows that available sources of funds and the level of national incomes or the level of a country’s economic development are closely related. Overall, ASEAN gives the highest priority to economic development, creation of innovation and infrastructure investment (SDG 8 and SDG 9), while environmental development and earth conservation appear to receive lower priority (SDG12- SDG15). Furthermore, low-income countries, such as CLMV countries, cannot afford to finance their SDGs initiatives and hence make slow progress in the SDGs. The per-capita SDGs fund, a proxy for quality of investment in sustainable development, is also differed by the level of country’s incomes. The report also proposes a set of policy recommendations for the development of the financial sector’s role in the SDGs as well as possible innovative financing for development.

Caja de ahorro informal, una opción de autoapoyo económico en sectores de bajos recursos

Introducción: La pobreza perjudica a las personas al limitarles la posibilidad de cubrir sus necesidades básicas, y en la mayoría de las ocasiones el acceso a los sistemas formales de financiamiento. Esta situación lleva a que las personas se organicen en estructuras de autoayuda comunitaria para poder acceder a servicios de ahorro y crédito. En aras de comprender las dinámicas de operación de estas estructuras de autoayuda, esta investigación permite conocer a detalle la operatividad de una caja de ahorro informal, los beneficios económicos que se generan al interior de sus participantes y sus similitudes con los datos de la Encuesta Nacional de Inclusión Financiera (ENIG) del año 2015.Método: Estudio descriptivo con un método cualitativo de estudio de caso. El trabajo de campo se llevó in situ por 50 semanas. Análisis de documentos y registros internos, aplicación de entrevistas, cuestionarios y observación directa.Resultados: El 50% de los integrantes de la Caja de Ahorro Informal utilizan el dinero para el pago de deudas versus el 33% del nivel nacional. Las mujeres son quienes utilizan sus ahorros y ganancias para aumentar su masa de rendimiento a través de la inversión o creación de micronegocios. Las personas que obtuvieron una mayor tasa pasiva fueron del 32% y la menor del 21%. Entre los 22 miembros de la CAI se obtuvo un ahorro de $160,100.00 con un monto de préstamos de $255,500.00.Discusión o Conclusión: La demanda de servicios financieros de la población de bajos ingresos no atendida por la banca comercial propicia el surgimiento de entidades al margen de las estructuras formales del mercado financiero. Estos sistemas informales ofrecen servicios flexibles de ahorro y crédito acorde a las necesidades y expectativas de sus integrantes.

Macroeconomic Policy Options for a Savings Constrained Economy: The Case of South Africa

Abstract The extensive diagnostic studies and policy recommendations that exist for South Africa typically focus on microeconomic constraints to growth. Higher potential growth certainly requires structural reforms to boost productivity growth. But these will also be more effective if macroeconomic policy no longer impedes the needed relative price adjustments and consequential factor allocations to achieve higher productivity. We assess the performance of macroeconomic policy over the last 10 years. Our conclusion is that a different policy mix could have generated higher growth outcomes and provided the fiscal space to respond to the current Covid-19 crisis more effectively. In the post–global financial crisis era, fiscal resources were wasted in trying to stimulate in the face of a structural decline in economic growth. Restoring South Africa’s growth requires a comprehensive change in economic policy to target fiscal consolidation, shift the composition of expenditure to investment and human capital creation and permanently embed lower inflation. Macroprudential policy should better support long-term private sector investment. And, the country urgently needs an ambitious and rapidly implemented structural reform agenda that targets higher productivity growth.

Evaluación del riesgo y rendimiento de un portafolio compuesto por dos activos: Una aplicación para las acciones de McDonald´s Corporation y Nike, Inc.

La creación de portafolios de inversión a través del proceso de diversificación, hace efectiva la optimización del riesgo y rendimiento. El objetivo de este trabajo consistió en la conformación de portafolios compuestos por las acciones de la compañía McDonald´s y Nike, Inc., con el propósito de obtener el mayor beneficio al menor riesgo posible. Para determinar el riesgo y rendimiento de los activos, se utilizaron las técnicas estadísticas como la media o promedio, rango, varianza, desviación estándar y el coeficiente de variación de los activos individuales. Los resultados obtenidos señalaron que el rendimiento de los portafolios de mínima varianza y máximo desempeño fueron similares, siendo de 1.54% y 1.55% respectivamente. De igual manera en lo que se refiere al riesgo siendo de 3.41% y 3.42% para el portafolio de mínima varianza y máximo desempeño, respectivamente, medidos a través de la desviación estándar. En cuanto al coeficiente de variación, el resultado obtenido por el portafolio de mínima varianza fue de 2.22 mientras que el de máximo desempeño obtuvo un valor de 2.21. Dadas las similitudes de ambos portafolios, la decisión de inversión estará en dependencia del nivel de riesgo que esté dispuesto a asumir el inversionista y optar por el portafolio de mínima varianza o el de máximo desempeño.

Professional Investment Standards in the Private Equity Sector: Selected Aspects

Investments made by private equity funds must abide by the highest ethical standards as the framework within which their stakeholders operate is very much based on broadly understood trust. The paper discusses selected professional standards especially important for private equity transactions. It is based on the Professional Standards Handbook, a set of principles focusing on integrity and acting with fairness, keeping one’s promises, disclosing conflicts of interest, maintaining confidentiality, and promoting best practices for the benefit of sustainable investment and value creation. We also address the ESG issues which – besides financial aspects – exert substantial impact upon sustainable development of the private equity market. Ethical standards have gained in importance especially with the adoption of the AIFM Directive designed to regulate the operations of alternativeinvestment funds.