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Komfie Manalo, Opalesque Asia: The flurry of M&A activities in May has proved supportive for event driven hedge funds. On a monthly basis, event driven is ahead of the pack, with the Lyxor Event Driven Broad Index up 0.5% as of May 24 (-1.4% YTD), according to Lyxor Asset Management.
Philippe Ferreira, senior strategist at Lyxor AM, commented, "Event driven strategies were supported by a broad based tightening of deal spreads, in particular in the pharmaceutical sector. Special situations outperformed their M&A peers during the week. Long term CTAs, hit by the strengthening of the U.S. dollar and rising yields on both sides of the Atlantic, dragged the overall hedge fund performance down."
The Lyxor Hedge Fund Index was up 0.2% during the period (-2.6%YTD); with fixed income strategies outperforming. Fixed income & L/S credit funds were supported by the recovery in high yield and in particular by the rebound in European financials.
May has seen a flurry of M&A activity
Lyxor said that several companies decided to unveil their merger plans in May, following a slow start to the year for M&A activity. According to Bloomberg, the volume of global M&A in May has almost doubled compared to the previous month (to USD 340bn) and has risen by 30% compared to the same period last year. Activity has been particularly strong in the U.S.: Volumes are up 120% in May compared to April (to $225bn) and up by almost 30% ...................... To view our full article Click here
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