Fordham Finance, Securities and Tax Law Forum
Fordham University School of Law | March 13, 1997

* This speech was part of Fordham University School of Law symposium, entitled Reshaping Corporate Governance & Shareholder Activism for the 21st Century.

Jon Lukomnik **

** Jon Lukomnik oversees nearly $70 billion in pension fund assets as the Deputy Comptroller for Pensions for the City of New York. He also serves as a trustee for four major defined benefit pension systems, one major defined contribution system and several smaller systems, with assets of more than $80 billion. He is co-author of ALPHA: THE POSITIVE SIDE OF RISK (Investors Press, 1996) and has written articles in Directorship and Global Investor.

Text: 5,278 words
SUMMARY:
… It may be peculiar to be at a law forum as a non-lawyer, but I think what Kim [Morrow] had in mind was for me to answer the fundamental question: Why do we care? Why has corporate governance become so mainstream in the last dozen years that, as Professor Katsoris said, enhancing shareholder value has become a virtually meaningless mantra, whispered by every CEO, corporate raider, corporate governance activist, the press and anyone else who cares to comment? I think answering that question is a good idea. … We are very content to be in the dining room asking whether the chef knows what he is cooking, as opposed to cooking ourselves. … What we really try to do is to remove any impediments to good corporate governance, not dictate what corporate strategy should be. … A corporate governance activist, Nell Minow of the Washington, D.C. based Lens Fund puts it a different way, only partially tongue in cheek. … I want to thank the Fordham Finance, Securities and Tax Law Forum and Kim Morrow for this opportunity. …

Citation:
n32 See Alyssa A. Lappen, “BGI Thinks Big,” INST. INVESTOR, Apr. 1, 1997, at 62 (discussing the analytical strategy of outperforming the S & P in a very risk-controlled manner).

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By CLAIRE A. HILL *
Washington University Law Quarterly | Winter, 1996 | Vol. 74, No. 4, 1996

I. Introduction

Securitization 1 was invented in the early 1970s. 2 Since then, the transaction volume has exploded. By the end of 1994, more than $ 1.9 trillion securitization securities were outstanding, and more than $ 500 billion of securitization transactions were done in 1994 alone. 3 And securitization is expected to remain a significant source of financing in the years to come. 4

Securitization is a technique firms use to raise financing. In securitization transactions, financiers purchase securities payable from collections on a firm’s receivables. Contrasted with many other financing techniques, securitization looks very complex. 5 Complexity is rarely, if ever, costless. If financing decisions are made rationally, securitization transactions must offer benefits that simpler financing techniques do not.

Practitioners tout securitization’s ability to enable: (1) a low quality firm to, in effect, issue high quality securities, and (2) cash flow streams saleable only at sizeable discounts on lower priced financial markets to be transformed into securities saleable at much smaller discounts on higher priced capital markets. 6 The claim, more generally, is that securitization is a method for packaging cash flow streams of receivables for higher valued (and higher priced) uses, at a cost lower than the increment of value added. 7

The famous Modigliani and Miller capital structure irrelevance theorem holds that capital structure – the way a firm carves up its cash outflows into one or more layers of debt or equity – is irrelevant to firm value. 8 Financing transactions, such as securitization, are the …

NOTES:
133. See Michael Carroll and Alyssa A. Lappen, “Mortgage-Backed Mayhem,” Institutional Investor, July 1994, at 81.
225. Caroll & Lappen, supra note 133, at 81.

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All Rights Reserved.
Printing is allowed for personal use only | Commercial usage (For Profit) is a copyright violation and written permission must be granted first.

By Arthur Zeikel

Financial Analysts Journal | September/October 1996

CFA Institute
Vol. 52, No. 5 : pp. 8-16

“Alyssa A. Lappen (1996), in reviewing the recent experience of Boston Company Asset Management, noted, “The rise of Boston Partners [Boston Company Asset Management] attests to some fundamental but often overlooked truths about the nature of the money management business.”

All Articles, Poems & Commentaries Copyright © 1971-2021 Alyssa A. Lappen
All Rights Reserved.
Printing is allowed for personal use only | Commercial usage (For Profit) is a copyright violation and written permission must be granted first.