With eventdriven investing, instead of waiting for the long term, we wait only for the consummation of various corporate events for security prices to move towards fundamental value. The eventdriven universe consists of investment opportunities that arise from significant. Driven investing finding alphas wiley online library. Eventdriven investing is a strategy that aims to profit from the outcome of specific corporate events including mergers, acquisitions, spinoffs, and bankruptcies. These strategies aim to generate attractive returns uncorrelated to the market by investing in securities that have an event tied to the company. Success of event driven trading depends on successful prediction of whether. Event driven investing focuses on capturing the value gap created when companies undergo these transformative corporate events or catalysts.
I would say most spikes are hard to time for the normal investor. The product is a deep dive into the data, offering detailed. Focus on capturing the value gap ceos are incentivized to execute on strategic corporate initiatives across market cycles to create shareholder value. Joseph nicholas defines event driven strategies in his book hedge fund of funds. Eventdriven trading and the new news david leinweber, jacob sisk the journal of portfolio management oct 2011, 38 1 110124. Rhizome also hedged its berry global position with january 2020 puts with strike prices 14% lower than the stock price at the end of. Eventdriven investing is a strategy that aims to profit from the outcome of specific corporate events including mergers, acquisitions, spinoffs, and bankruptcies, among other corporate transactions. Eventdriven trading and the new news article pdf available in the journal of portfolio management 381.
Eventdriven investing is an investing strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, merger, acquisition or spinoff. Investors who use an eventdriven strategy employ teams of specialists who are experts in analyzing corporate actions and determining the. The gmo eventdriven strategy focuses primarily on merger arbitrage transactions, supplemented by other event. Event driven in the context of hedge funds, a style of management that combines many different types of hedge fund investing such as merger arbitrage, distressed securities and high yield investing, in. The socalled death of eventdriven investing financial. Three essays on an eventdriven investment strategy. Success of event driven trading depends on successful prediction of whether various catalyst events will in fact occur or be finalized. Goldman sachs analyzed bear markets going back to 1835, and then classified them as structural, cyclical or eventdriven.
This catalyst cap intro event focuses only on the ls equity event driven investing space. The portfolio managers of these event driven strategies opportunistically invest both long and short in corporate equity and credit to take advantage of market mispricings related to these company specific events. Eventdriven investing is not dead, it will just morph. Eventdriven investing under which we include everything from merger arbitrage to distressed is a particularly attractive set of hedge fund strategies for two main reasons. Introductions are accomplished through private meetings which are arranged prior the events, in an investor driven. These strategies aim to generate attractive returns uncorrelated to the market by investing in securities that have an event. Merger arbitrage a fundamental approach to eventdriven investing helps readers understand the inner workings of the strategy and hedge funds which engaged in this investment strategy. Goldman sachs analyzed bear markets back to 1835, and here. It has a lot of different trading resources, but one that you might like is global economics.
Do you guys have any suggestion for book or blog that is focused on eventdriven strategy. Ls equity event driven investing catalyst financial. Books on event driven strategies wall street oasis. One site that i like to use is browse products marketfy. But it seems a safe bet that the loebs and ackmans of the world will be less loud this. An event driven strategy is a type of investment strategy that attempts to take advantage of temporary stock mispricing that can occur before or after a corporate.
A fundamental approach to eventdriven investing the wiley finance series kindle edition by melka, lionel, shabi, amit, zaoui, michael. An overview of event driven strategies by phase of economic cycle and implementation in the capital structure, including merger. There are few riskless trades but the successful management of assessed risks should, over time, deliver superior returns. Eventdriven value investing with authors jeff gramm. Eventdriven investing has long evoked the image of the suspenderclad 1980s corporate raider hunting for undervalued, managementheavy companies and, more recently, has been. Use features like bookmarks, note taking and highlighting while reading merger arbitrage. The prospectus and summary prospectus contain this and other important information about the fund. This involves eventdriven managers seeking to profit from security pricing inefficiencies that can occur when companies are. Eventdriven investing is a strategy that aims to profit from the outcome of specific corporate events including mergers. The eventdriven credit strategy focuses on investing in securities of companies facing a corporate, market or regulatory event. Eventdriven investment fund is ready for volatility with.
How to profit from eventdriven arbitrage, second edition is the definitive guide to the ins and outs of the burgeoning merger arbitrage hedge fund strategy, with real. Eventdriven investment strategies eventdriven is a hedge fund investment strategy where investors seek to capitalize on the opportunities inherent in specific corporate events. Nokias shares rose roughly 35 per cent on the news, while microsofts fell 5 per cent. Such events may include balancesheet restructurings, mergers or acquisitions, litigation or regulatory actions, or any other perceived change in the investment. The markets reaction to this type of event is how eventdriven hedge funds make, or lose, their money. An eventdriven strategy refers to an investment strategy in which an institutional investor attempts to profit from a stock mispricing that may occur during or after a corporate event. Chapter 1 documents that market responds negatively to dividend cuts and positively to dividend increases. To illustrate, consider what happens in the case of a potential acquisition. Email facebook twitter linkedin add to my pages event driven. Eighty percent of the eventdriven investment is hedged. Eventdriven hedge funds place trades in the securities of specific compa.
New eventdriven hedge funds were launched for example, newyorkbased kellner had launched eventdriven hedge fund, capital with chris pultz and californiabased omni partners. This dissertation consists of three individual chapters. Event driven investing requires corporate activity and some level of inefficiency. The premise of the strategy is to make an investment in a company that has announced or expects to undergo a material change that is expected to impact shareholder value.
Beyond the traditional balanced portfolio this strategy offers the potential to minimize the drag of inflation and rising interest rates on returns while. This is one place where writing in the third person leaves a lot out. Eventdriven trading and the new news the journal of. Download it once and read it on your kindle device, pc, phones or tablets. Event driven strategies play the role of diversifiers in a portfolio. But it seems a safe bet that the loebs and ackmans of the world will be less loud this year. Event driven value investments wisdom on such diverse topics as. Joseph nicholas defines eventdriven strategies in his book hedge fund of funds investing 2004 as strategies that are based on investments in opportunities. The goal is to identify securities with a favorable riskreward ratio based on. Eventdriven investment alternative assets and strategic. Eventdriven investing is a hedge fund investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as an earnings call, bankruptcy, merger, acquisition.
Event driven managers seek to profit from security pricing inefficiencies that may occur when companies are involved in corporate events such as mergers. What are some good resources to learn about eventdriven. The rules of eventdriven investing have changed seeking. Winning eventdriven investments take care of themselves, typically offering a profit, liquidity, and portfolio. To obtain a copy of the prospectussummary prospectus, please call 877 7790079. Eventdriven investing is also best sized and monitored with an eye to the downside. Structural bear markets, on average, see drops of 57%, and cyclical. Investing nicholas, 2004 as strategies that are based on investments in. Please consider the investment objectives, risks, fees and expenses of the fund carefully prior to investing. The facts event driven strategies funds in focus event driven strategies funds in focus we focus on event driven strategies hedge funds, including a breakdown of substrategies utilized and where the. Some hedge funds choose to focus on eventdriven strategies.
1669 958 656 987 787 374 727 1028 1160 199 1308 1141 246 1017 1449 31 778 978 406 303 331 332 1585 435 972 991 438 820 1238 133 939 1351 1109 1374 30 1230 938 541 257 1412 446 630 1087 742