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Merger Arbitrage: How to Profit from Event-Driven Arbitrage by Thomas Kirchner

Merger Arbitrage: How to Profit from Event-Driven Arbitrage Thomas Kirchner ebook
Format: pdf
Publisher: Wiley
Page: 370
ISBN: 0470371978,

Contrarily, Paulson Advantage and Advantage Plus are down 12.68 and 18.4 percent respectively. Genesco's management would be well advised to insist on a floor to ensure that the certain erosion of FINL's stock price resulting from inevitable arbitrage shorting of FINL will not destroy the value received by GCO's current shareholders. Merger Arbitrage or relative-value strategy hedge funds which aim to profit off from mispricings while unsuccessful in others. Genesco's (GCO) poor second quarter results triggered a panicked reaction from Finish Line (FINL), which is “evaluating its options regarding” the merger of the two firms. Staying Market Neutral As investors crave more advanced The underlying index is rebalanced every five days, rather than monthly or quarterly, allowing for the fund to capture these event driven gains. With something like merger arbitrage (or anything else that's event-driven), you can still apply the same framework but the catalyst becomes a much more central part of your recommendation. There are opportunities to profit from this growth in acquisition activity. Disclosure: Thomas Kirchner manages the Pennsylvania Avenue Event-Driven Fund (PAEDX), which owns shares of Sun Microsystems as part of its merger arbitrage strategy. The arbitrage fund, Paulson Enhanced, is up 10.5 percent while Paulson International is up almost 5 percent. Often, you're tasked with analyzing an investment opportunity with . The fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, is down 18 percent this year with the July loss. Event-driven funds seek to profit from securities whose value is affected by events such as mergers and acquisitions, and reorganizations. However, merger arbitrage works best over several different deals and opportunities, requiring heavy capital constraints making it pretty inaccessible for most retail investors. Case studies are what you really do on the job – you generate investment ideas, present them to the PM, and aim to profit from your ideas while mitigating risk. AIM: Describe the underlying characteristics, sources of returns and risk exposures of various hedge fund strategies including: Event-driven and merger arbitrage. Surprisingly, John Paulson's merger arbitrage funds are returning better than his event driven strategies. Predictably, in the current jittery market, . Paulson's Gold Fund, which can buy The firm's merger arbitrage, credit and recovery funds, which comprise more than 60 percent of the firm's $21 billion in assets, rose this year on the firm's “long event positions,” Paulson said today in the letter to clients.