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Laxman Pai, Opalesque Asia:

Activists have not shown the same appetite for bargains than in previous selloffs, said Lyxor.

A V-shaped market rebound and rich valuations are not providing a large universe of oversold stocks. Moreover, given that the full effects of the pandemic on businesses have yet to emerge, concentrated and buy-and-hold Special Situations managers are still reluctant to add much risk. Instead, they have opportunistically picked cheap stocks still under pressure from the virus, in aerospace, REITs, financial services, leisure businesses - a majority of which performed nicely in the recent weeks.

According to public filings as of the end of March, in aggregate, the bulk of activists' positions concentrate in financials, tech and communications, and industrials sectors.

So far, corporate activity is still far from the pre-crisis level. M&A, asset sales, IPOs, which are critical in Special Situations' exit strategies, remain anemic.

Encouragingly, the number of extraordinary shareholder meetings, where most corporate operations are decided, are healthily rebounding. It suggests corporate activity will normalize along with trading conditions.

A more decisive rotation back into value stocks, especially in the small and mid-cap segments, would also be a strong tailwind for Event-Driven managers (and for most fundamental investors). "We keep a constructive view," Lyxor said.

The Special Situations strategy went through a roll......................

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