Banking on innovation: Listed and non-listed equity investing, evidence from société générale de Belgique, 1850–1934

Société Générale de Belgique was the world's first universal bank. It pioneered another innovation: investing in non-listed equity. We use hand-collected data to show that the bank earned significant positive risk-adjusted returns from 1850 to 1934. This offset its flat return on the listed equ...

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Bibliographic Details
Published in:Explorations in economic history 2024-07, Vol.93, p.101593, Article 101593
Main Authors: Verdickt, Gertjan, Deloof, Marc
Format: Article
Language:English
Subjects:
Asset management
Banking history
Holding companies
Private equity
Universal banking
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Summary:Société Générale de Belgique was the world's first universal bank. It pioneered another innovation: investing in non-listed equity. We use hand-collected data to show that the bank earned significant positive risk-adjusted returns from 1850 to 1934. This offset its flat return on the listed equity portfolio and underperforming bond portfolio. Other Belgian universal banks followed this strategy. As such, we argue that this innovation laid the groundwork for other financial institutions to invest in listed and non-listed assets.
ISSN:0014-4983
1090-2457
DOI:10.1016/j.eeh.2024.101593