Posts tagged 'Merger Arbitrage'

Hedge funds are flying high

Five months in and it’s been a pretty good year for hedge funds with the HFRI fund weighted composite index up 4.4 per cent year to date, following its strongest first quarter performance since 2006. The index fell 5.25 per cent last year.

There was a small 0.36 per cent fall last month, but it’s unlikely to deter investors who have been scrambling to take advantage of the strong start to the year. Total hedge fund capital reached a dizzying record $2.13tn at the end of last quarter on a mix of performance and net inflows, according to Hedge Fund Research estimates. Read more

Offer talks terminated

First BSkyB, then Laird and now Misys.

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Upsets hit merger arbitrage investors

Merger arbitrage investors are braced for a second consecutive month of losses with a string of unexpected upsets leading to a difficult period for the hedge fund strategy, the FT reports. Arbitrageurs – who invest during takeovers in the hope of capturing the difference between the target’s stock price and the eventual value of a deal – finished down slightly in May, according to Hedge Fund Research’s global data. With a week left to run in June, the strategy is down a further 1.38 per cent, leaving it scarcely in the black for the year. That leaves deal investors facing back-to-back months of negative performance for the first time since late 2008, when the financial crisis hit markets. Merger arbitrage funds have enjoyed successive quarters of inflows as investors eye a pick-up in deals as the global economy recovers. The sector has more than $18bn under management globally.

Merger arbitrage investors see losses

Merger arbitrage investors are braced for a second consecutive month of losses after a string of unexpected upsets marred the the hedge fund strategy, reports the FT. Arbitrageurs – who invest during takeovers in the hope of capturing the difference between the target’s stock price and the eventual value of a deal – finished down slightly in May, according to Hedge Fund Research’s global data. With a week left to run in June, the strategy is down a further 1.38%, leaving it scarcely in the black for the year. That leaves deal investors facing back-to-back months of negative performance for the first time since late 2008, when the financial crisis hit markets. Merger arbitrage funds have enjoyed successive quarters of inflows as investors eye a pick-up in deals as the global economy recovers. The sector has more than $18bn under management globally.

Merger arbitrage funds eye revival

Investors have turned back to merger arbitrage funds amid an expected recovery in dealmaking,  reports the FT. The first half of 2010 has seen a series of start-ups of hedge funds aiming to profit from takeover activity. Among them are Europe’s two biggest launches since 2008 – Tyrus Capital, which raised $800m for its fund and Burren Capital, which raised $500m. In total, merger arbitrage specialists have seen $841m in net inflows since January, according to Hedge Fund Research.