To secure the shares of the target company, the acquiring firm must offer more than the current value of the shares. Arbitrage Fund, launched in 2000, seeks capital growth through an investment approach focused on the strategy of merger arbitrage. Higher Sharpe ratios typically indicate better historical risk-adjusted performance. The Fund seeks to exploit mispricings in markets through a diversified investment approach across merger arbitrage, convertible arbitrage and a suite of event-driven strategies. Performance Awards. At this time when the strategy was still new and lacked substantial competition, returns were very high, with some arbitrage firms averaging returns above 20% per annum. The high level of expertise required for this strategy is the main reason why the main users of merger arbitrage are large institutional investors such as investment banks, private equity firms, and hedge funds. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Merger arbitrage is an investment strategy that simultaneously buys and sells the stocks of two merging companies. Derivatives may create leverage which will amplify the effect of the performance of those instruments on the Fund and may produce significant losses. © 2020 Morningstar, Inc. All Rights Reserved. In a stock-for-stock merger, a merger arbitrageur typically buys shares of the target company's stock while shorting shares of the acquiring company's stock. Management owns just 3 percent of the fund. The Infinity Core Alternative Fund and The Relative Value are distributed by Foreside Fund Services, LLC. Investments in foreign companies may entail political, cultural, regulatory, legal, and tax risks different from those associated with comparable transactions in the United States. Merger arbitrage can be profitable because stock prices often decline in the process of a merger because of the possibility that the merger negotiations will fail. Leverage: We use it. The Fund's hedging strategy will be subject to the Fund's investment adviser's ability to assess correctly the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged. Vivaldi Merger Arbitrage I VARBX Morningstar Analyst Rating Quantitative rating as of Jan 31, 2021. All Rights Reserved. Takeover (target) stocks normally trade at a discount to the deal price because there is typically some risk of the transaction either being delayed or terminated. IMST Distributors, LLC is the distributor for the Vivaldi Merger Arbitrage Fund and the Vivaldi Multi-Strategy Fund. Merger arbitrage, also known as risk arbitrage, is a subset of event-driven investing or trading, which involves exploiting market inefficiencies before or after a merger or acquisition. Valhalla, NY 10595. A backflip takeover is a rare type of takeover in which the acquirer becomes a subsidiary of the company it purchased. Gabelli ABC is a freewheeling fund that engages in merger arbitrage. The Fund's objective is to seek capital appreciation as a result of exposure to a merger arbitrage strategy. Indeed, Chicago Capital Management, LLC, the firm that he founded in 1997, is a specialist in merger-arbitrage investing. Principal loss is possible. Merger arbitrage managers try to profit from this spread while hedging their positions against a variety of risks. Strategy Overview. The MontLake Abrax Merger Arbitrage UCITS Fund is a global merger arbitrage and hard catalyst only focused investment fund managed by a highly experienced team. A stock swap is the exchange of one equity-based asset for another. Merger-arbitrage funds have been drawing investors. Its edge comes from an investment process that leverages a combination of legal, investment banking, and … Since there is a probability the deal may not be approved, merger arbitrage carries some risk. Merger arbitrage, also known as risk arbitrage, is an investment strategy designed to benefit from the successful completion of announced, legally-binding, merger and acquisition deals (M&A). Leverage has both good But don’t think Gordon Gekko. Arbitrage, at its most simplest, involves buying securities on one market for immediate resale on another market in order to profit from a price discrepancy. Through in-depth research, judicious selection of deals, active trading and disciplined risk management, the Fund is focused on late stage M&A situations with firm merger agreements in place. The Merger Fund Investor Class 3 year Sharpe ratio as of 12/31/2020 is 1.39 versus the S&P Sharpe Ratio of 0.72 over the same time period. The Merger Fund®, WCM Alternatives: Event-Driven Fund and WCM Alternatives: Credit Event Fund are offered only to United States residents, and information on this site is intended only for such persons. Before we get too into the specifics of how merger arbitrage strategies work, let’s recap the basic concept of arbitrage. Abrax Merger Arbitrage Fund Ltd. CUSIP 0001714275 ; A merger arbitrage strategy that seeks to exploit opportunities arising from late-stage M&A situations by managing a portfolio of equities and using leverage to maximise returns. IMST Distributors, LLC is the distributor for the Vivaldi Merger Arbitrage Fund and the Vivaldi Multi-Strategy Fund. Principal loss is possible. Historical Returns from Merger Arbitrage. Increased portfolio turnover may result in higher brokerage commissions, dealer mark‐ups and other transaction costs. IMST Distributors, LLC is the distributor for the Vivaldi Merger Arbitrage Fund and the Vivaldi Multi-Strategy Fund. Merger arbitrage mutual funds and exchange-traded funds can help you reduce your portfolio's volatility. Principal loss is possible. Investing involves risk. They aim for modest returns, more like bond funds. Measure ad performance. Mergers and acquisitions (M&A) is a general term that refers to the consolidation of companies or assets through various types of financial transactions. The spread is the opportunity the “arbs” use to profit from merger arbitrage. The current prospectuses contain this and other information about the Funds. Alternatively, if there is an alternative suitor, company C, which also wants to buy company B, a bidding war may ensue. Investment Objective: Alpine Merger Arbitrage A EUR Acc: The investment objective of the Fund is to seek capital appreciation as a result of exposure to a merger arbitrage strategy, as further explained in greater detail below. Merger arbitrage funds try to capitalize on the change in a stock’s price after an M&A deal is announced. THE MERGER FUND. Arbitrage’s only other down year came in 2005, when it dipped 0.2%. In an all-cash merger, investors generally take a long position in the target firm. The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Simple case of merger arbitrage when there is an all cash acquisition. When considering a deal, arbitrageurs must: There are three principal categories of mergers: cash mergers, stock-for-stock mergers and mixed stock and cash mergers. Principal loss is possible. The Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The size of this discount, known as the arbitrage "spread", is influenced both by general market conditions, as well as by deal-specific considerations that affect the transaction's timing and perceived probability of success. Merger arbitrage is the business of trading stocks in companies that are involved in takeovers or mergers.The most basic of these trades involves buying shares in … While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. The Infinity Core Alternative Fund and The Relative Value are distributed by Foreside Fund Services, LLC. Develop and improve products. Nothing on this website should be considered a solicitation to buy nor an offer to sell shares of the funds in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. The Fund seeks investment results that track, before fees and expenses, the price and yield performance of the IQ Merger Arbitrage Index. Another catalyst for investor interest in the Aon and WTW deal has been the recent move by Warren … Create a personalised content profile. Mutual fund investing involves risk. The Fund seeks to exploit mispricings in markets through a diversified investment approach across merger arbitrage, convertible arbitrage and a suite of event-driven strategies. The frequency of the Fund's transactions will vary from year to year, though merger arbitrage portfolios typically have higher turnover rates than portfolios of typical long‐only funds. The Vivaldi Merger Arbitrage Fund seeks returns that are largely uncorrelated to the general stock market, and capital appreciation. The Index is designed to reflect a pure-play, global merger arbitrage strategy investing in … Merger arbitrage is a complex strategy. Introducing O'Connor's Merger Arbitrage investment team—get to know our people, approach and outlook ... nor should it be considered a recommendation to purchase or sell any particular security or fund. Merger arbitrage, often considered a hedge fund strategy, involves simultaneously purchasing and selling the respective stock of two merging companies to create "riskless" profits. Arbitrage Fund, launched in 2000, seeks capital growth through an investment approach focused on the strategy of merger arbitrage. Therefore, a merger arbitrage manager can buy the stock of the target company before the acquisition, and then make a profit if and when the acquisition is completed. Fund Filings. Merger‐arbitrage and event‐driven investing involves the risk that the adviser's evaluation of the outcome of a proposed event, whether it be a merger, reorganization, regulatory issue or other event, will prove incorrect and that the Fund's return on the investment will be negative. Merger Arbitrage investing at UBS O'Connor Introducing O'Connor's Merger Arbitrage investment team—get to know our people, approach and outlook 22 Jun 2018 However, the target company's stock price typically remains below the announced acquisition price, which is reflective of the deal's uncertainty. Ten year ratings are Extended Performance Ratings computed by Morningstar based on the MERFX share class. Because there is the uncertainty of the deal being completed, the stock price of the target company typically sells at a price below the acquisition price. Email: Returns have historically had low correlation with the stock and bond market. The Accelerate Arbitrage Fund (TSX: ARB) provides exposure to SPAC arbitrage and merger arbitrage investment strategies. Mutual fund investing involves risk. In the simplest form of such a transaction, the buyer (acquirer) makes an offer for the seller’s (target) stock, almost always at a premium to the market price of the seller’s stock. Quote Fund ... allowing for more consistent cost comparisons across funds. Occasionally, the stock price of company B may rise above the offer price as the market anticipates a higher bid from the company A in order to secure approval for the deal. In this piece, we explore why many investors are optimistic about the prospects for merger arbitrage in the months ahead. Select personalised ads. Apply market research to generate audience insights. Opportunity: Merger arbitrage investments represent the most attractive opportunity set in decades as a result of levered arbitrage funds facing margin calls, and multi-strategy funds exiting merger investments entirely. Merger arbitrage, often considered a hedge fund strategy, involves simultaneously purchasing and selling the respective stock of two merging companies to create "riskless" profits. It is calculated by dividing a fund's annualized excess returns over the risk-free rate by its annualized standard deviation for the same period. Merger arbitrage is an absolute return strategy that seeks capital growth by investing in companies involved in pending mergers, takeovers and other corporate reorganizations with the goal of profiting from the timely completion of these transactions. The Infinity Core Alternative Fund and The Relative Value are distributed by Foreside Fund Services, LLC. Until the acquisition is complete, the stock of the target company typically trades below the acquisition price. Summary Prospectus - Arbitrage Summary Prospectus - Water Island Event-Driven Summary Prospectus - Water Island Credit Opportunities. Fax: 914-741-2950
A merger arbitrage takes advantage of market inefficiencies surrounding mergers and acquisitions. Read the press release for more information on the awards. If the price of a security sold short increases between the time of the short sale and the time the Fund covers its short position, the Fund will incur a loss. Merger arbitrage, a strategy that involves the simultaneous purchase and sale of stocks in two companies that are merging, is one of these strategies. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. The Index is designed to reflect a pure-play, global merger arbitrage strategy investing in definitive, publicly announced mergers … Global Macro strategies underperformed so far year-to date (+0.8%) as EM-focused Macro strategies were virtually flat (+0.2%) and Systematic Macro returns were minimal (+0.5%). Merger Fund has invested in merger-arbitrage strategies since its 1989 inception. An acquisition is a corporate action in which one company purchases most or all of another company's shares to gain control of that company. If a merger deal breaks, the target company's share price typically falls to its share price prior to the deal announcement. Merger Fund has invested in merger-arbitrage strategies since its 1989 inception. Some investors have been turning to a mutual-fund niche that may offer an attractive way to diversify away from the risks of stocks or bonds: funds that engage in merger arbitrage. In general, merger arbitrage managers seek to make their investment strategies as market-neutral as possible, leaving the bulk of the portfolio’s exposure to whether or not specific corporate events actually occur. ©2021 Westchester Capital Funds. A regular portfolio manager often focuses on the profitability of the merged entity. The Infinity Core Alternative Fund and The Relative Value are distributed by Foreside Fund Services, LLC. The Index seeks to achieve capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer. Merger arbitrage, also known as risk arbitrage, is an investment strategy designed to benefit from the successful completion of announced, legally-binding, merger … Mergers may break due to a multitude of reasons, such as regulations, financial instability, or unfavorable tax implications. Alpine Merger Arbitrage Fund is an open-end fund incorporated in Ireland. The Fund may enter into short sale transactions for, among other reasons, purposes of protecting against a decline in the market value of the acquiring company's shares prior to the acquisition completion. because there is less competition in these mergers, spreads tend to be larger. Merger arbitrage is the business of trading stocks in companies that are involved in takeovers or mergers.The most basic of these trades involves buying shares in … By contrast, merger arbitrageurs focus on the probability of the deal being approved and how long it will take to finalize the deal. Telephone: 914-741-5600
Investing involves risk. Investing involves risk. To obtain a prospectus, please visit the Documents page of this website or call (800) 343-8959. As of December 31, 2020, The Merger Fund® was rated against the following numbers of U.S.-domiciled Market Neutral funds over the following time periods: 92 funds in the last three years, 72 funds in the last five years, and 23 funds in the last ten years. Abrax Merger Arbitrage Fund Ltd. CUSIP 0001714275 ; A merger arbitrage strategy that seeks to exploit opportunities arising from late-stage M&A situations by managing a portfolio of equities and using leverage to maximise returns. This is consistent with Candriam’s name – an acronym of Conviction And Responsibility In Asset Management (on the long-only side, Candriam has launched some ESG ETFs). The current minimum investment for Nineteen77 Global Merger Arbitrage Master Limited is $5000000. For more information, consult with your financial professional, or contact us at 914-741-5600 or info@mergerfund.com. WESTCHESTER CAPITAL MANAGEMENT, LLC
There are two main types of corporate mergers—cash and stock mergers. Merger arbitrage strategies, accordingly, attempt to profit by speculating on whether these M&A deals, once announced, will in fact be successfully completed. Introducing O'Connor's Merger Arbitrage investment team—get to know our people, approach and outlook. An investor should consider the investment objectives, risks, charges, and expenses of the Funds carefully before investing. The Fund seeks to provide investment results that correspond, before fees and expenses, to the performance of the Water Island Merger Arbitrage USD Hedged Index. Please read the prospectus carefully before investing. Leverage has both good It lost 0.6% last year. The offers that appear in this table are from partnerships from which Investopedia receives compensation. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. In cash mergers, the shareholders of the target company receive a cash consideration for their shares. Alternatively, a stock-for-stock merger involves the exchange of the acquiring company's stock for the target company's stock. Merger arbitrage fund managers invest in companies involved in a merger or an acquisition. However, the fund lagged the HFRI Merger Arbitrage Index and the S&P 500 which returned 5.38% and 20.54%, respectively. If the deal is thus completed and the target company’s stock is converted into the acquiring company’s stock, the merger arbitrageur could use the converted stock to cover the short position. Merger arbitrage has become a popular investment strategy used both by professional capital allocators and retail investors alike. The Merger Fund® – Institutional share class received a Morningstar rating of 5 stars, 4 stars and 4 stars for the three-, five- and ten-year periods, respectively. A strategy in which a hedge fund buys shares in two companies that are in the process of merging and sells the shares after the merger is complete. A fixed-dollar value collar is a strategy where a company that may be acquired can protect itself from the stock price fluctuations of the acquiring firm. With respect to these Market Neutral funds, The Merger Fund® - Investor share class received a Morningstar rating of 5 stars, 4 stars and 4 stars for the three-, five- and ten-year periods, respectively. Under such circumstances, managers have reduced the duration of the portfolio and concentrated it on high conviction deals,” they noted. The funds focus on investment approaches seeking low correlation, low volatility, capital preservation, and downside risk mitigation. They can also serve as a substitute for bond funds when interest rates rise. On a year-to-date basis, Merger Arbitrage remains the best performing strategy (+2.4%) in a context where SPACs experienced a sharp rebound (+17.9% for the IPOX SPAC Index year-to-date). RISK OF DEAL TERMINATION (OR DOWNSIDE RISK). The acquiring firm's stock price declines because of market speculation about the target firm or the price offered for the target firm. Merger‐arbitrage and event‐driven investing involves the risk that the adviser's evaluation of the outcome of a proposed event, whether it be a merger, reorganization, regulatory issue or other event, will prove incorrect and that the Fund's return on the investment will be negative. IQ Merger Arbitrage ETF Morningstar Risk-Adjusted Ratings: US Fund Market Neutral Category - Class Shares Overall Rating 4 stars out of 94 funds, 3 Year 3 stars out of 94 funds, 5 Year 4 stars out of 72 funds, 10 Year 4 stars out of 23 funds. Leverage: We use it. The investment seeks capital growth by engaging in merger arbitrage. Investment Approach Arbitrage strategies look for two related assets that are trading at different prices, then buy the cheaper one and sell short the more expensive one. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. Typically, when a target company is made a takeover offer by an acquiring company, the offer price does … List of Partners (vendors). Debt securities may fluctuate in value due to, among other things, changes in interest rates, general economic conditions, industry fundamentals, market sentiment and the financial condition of the issuer, including the issuer's credit rating or financial performance. Past performance is no guarantee of future results. The Fund seeks to provide investment results that correspond, before fees and expenses, to the performance of the Water Island Merger Arbitrage USD Hedged Index. The Funds are designed to provide investors more choice when considering an alternative source of returns to fortify a portfolio. The strategy seeks to take advantage of the return opportunity presented by the natural deal spread that emerges after the announcement of a merger or acquisition. In fact, the combined assets under management of M&A hedge funds has increased 5x over the last decade (to $72bn in 2019), while the combined value of all the deals done in 2019 in North America reaches $2 trillion dollars. On a month-by- Our manager employs a Select personalised content. The MontLake Abrax Merger Arbitrage UCITS Fund is a global merger arbitrage and hard catalyst only focused investment fund managed by a highly experienced team. Fees total 1.69% annually. Measure content performance. When a corporation announces its intent to acquire another corporation, the acquiring company's stock price typically decreases, and the target company's stock price increases. GAMCO INTERNATIONAL - GAMCO MERGER ARBITRAGE A FONDS Fonds (WKN A1JWYQ / ISIN LU0687943745) – Aktuelle Kursdaten, Nachrichten, Charts und Performance. In a cash merger, the acquiring company purchases the target company's shares for cash. MERGER ARBITRAGE. Create a personalised ads profile. The Arbitrage Funds offer a suite of event-driven strategies in liquid alternative mutual fund structures. Arbitrage, at its most simplest, involves buying securities on one market for immediate resale on another market in order to profit from a price discrepancy. Given the absolute return nature of the strategy and the focus on limiting downside risk, over the long term compounded rates of return have recently been higher than those afforded by traditional investing. Merger arbitrage, an original darling of hedge fund strategies, has gone through some tough times. 3-month fund flows is a metric that can be used to gauge the perceived popularity amongst investors of Merger Arbitrage relative to other alternatives. Use precise geolocation data. IQ Merger Arbitrage ETF has an MSCI ESG Fund Rating of BBB based on a score of 4.57 out of 10. The management of unwanted risk requires a combination of knowledge, experience and skill. A simple example will illustrate this: On June 13, 2016, Microsoft announced its acquisition of LinkedIn , offering $196 for each LinkedIn share. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. We have been approached by other institutional investors to establish a special purpose fund to take advantage of wide spreads caused by the market dislocation. 100 Summit Lake Drive
The investment seeks capital growth by engaging in merger arbitrage. A merger arbitrageur could also replicate this strategy using options, such as purchasing shares of the target company's stock while purchasing put options on the acquiring company's stock. Merger arbitrage is a strategy that focuses on the merger event rather than the overall performance of the stock market. The NexPoint Merger Arbitrage Fund was recognized as the top fund in the Merger Arbitrage category at the HFM U.S. Store and/or access information on a device. The mergers we avoid are more important than the mergers we invest in The distinguishing characteristics of the SilverPepper Merger Arbitrage Fund: Steve Gerbel is an expert in merger arbitrage. Principal loss is possible. Merger ArbitrAge Fund Class instl: SPAIX | Class Adv: SPABX Investment Strategy: Enduring Advantages Small-Cap Appetite: because we are committed to a smaller asset base, we can make meaningful investments in smaller companies. The Merger Fund®, The WCM Alternatives: Event-Driven Fund and The WCM Alternatives: Credit Event Fund are distributed by Compass Distributors, LLC. Select basic ads. Merger arbitrage is an investment strategy that simultaneously buys and sells the stocks of two merging companies. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Investment Approach Arbitrage strategies look for two related assets that are trading at different prices, then buy the cheaper one and sell short the more expensive one. All of this is peaking the interest of event driven equity investors at hedge fund managers, as well as the merger arbitrage specialist investors of the world. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. because there is less competition in these mergers, spreads tend to be larger. Distributors, LLC, which is not affiliated with the advisor or any of its affiliates. The funds are distributed by Compass
Actively scan device characteristics for identification. As a result, merger arbitrage strategies can generate positive returns in most market environments. This fund invests in companies being acquired in publicly announced mergers and acquisitions. Analyze public information regarding the companies in the transaction and the markets in which they compete, Estimate the probabilities of a government antitrust investigation and enforcement action and the likely outcome of such an action, Monitor litigation by government and private parties and analyze the likelihood of antitrust and other regulatory approvals, Mitigate various potential deal risks such as: acquirer termination, deal delay, material adverse changes to either party, shareholder disapproval, tax obligations and financing concerns, In hostile transactions, analyze target company anti-takeover defenses. Merger arbitrage has... View Article The amount of a potential loss on an uncovered short sale transaction is theoretically unlimited.