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

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. It employs structure arbitrage, closed-end fund arbitrage, pair trading, merger arbitrage and event driven strategies. Often, you're tasked with analyzing an investment . Relative value strategies include merger arbitrage, convertible bond arbitrage, fixed income arbitrage, mortgage backed arbitrage and capital structure arbitrage. He currently runs two hedge funds, the SOG Fund (global multi-strategy arbitrage) and SOGAsia. Event-driven Hedge Fund Strategy. The SOGAsia Fund was It is commonly viewed that arbitrage strategies have to leverage up to the high single digits in order to make money off some very small spreads. Event driven investment approaches generally carry a moderate risk. 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. Relative value strategies are arbitrage transactions that seek to profit from the spread between two securities rather than from the general market direction. Some of the Merger arbitrage – With this strategy, fund managers invest in unique opportunities for profit driven by corporate action. The first one pops up in our own merger arbitrage portfolio every December. The SOGAsia fund is an Asia including Japan, multi-strategy arbitrage fund. According to Mihaylo's calculations, INTL could be worth $28 after a recap, which is 5.6% more than shareholders would receive in the merger. That is the month Disclosure: Thomas Kirchner manages the Pennsylvania Avenue Event-Driven Fund [PAEDX], which uses merger arbitrage.