Opalesque Industry Update - Following the recent turmoil in financial markets, Bernheim, Dreyfus & Co, managers of the Diva Synergy Fund and the leveraged Diva Synergy Enhanced Fund, is seeing major opportunities for profit in the mergers and acquisition space. |
“In light of the anćmic returns equity holders have received since the subprime crisis, the obvious argument would be to give the money to shareholders in the form of higher dividends or stock repurchases,” says the Bernheim, Dreyfus 4th October report. “While this might be the ‘right thing’ to do, it appears that many companies are now looking at M&A as a more attractive outlet for this cash.”
M&A activity in the third quarter of 2010 was the busiest in two years, with $563 billion of announced transactions.
“With almost $3 trillion of cash in their coffers, companies drove a 59 percent increase in takeovers from a year ago. Record-low borrowing costs encouraged deal making … and the number of transactions valued at more than $3 billion doubled in the quarter. The jump in deals in the third quarter, typically the slowest three-month period of the year, brings total announced takeovers to $1.48 trillion in the first nine months of 2010, compared with $1.76 trillion in all of 2009. This quarter accounted for about 38 percent of the volume so far this year,” said the Bernheim, Dreyfus Report.
As the table below shows, the managers of the Diva Synergy Fund and the Diva Synergy Enhanced Fund (both euro and dollar classes) have moved quickly to exploit the opportunities arising from this expanding sector where third quarter M&A activity increased 21% over the second quarter of 2010, to $677 billion, the largest quarter for worldwide M&A since the third quarter of 2008.
Diva Synergy Fund gained over 3% in September (in both dollars and euros) to record figures of over 9.0% year to date); meanwhile the 3 x leveraged Diva Synergy Enhanced Fund gained 9.0% in both currency classes in September to record exceptional returns of 26.8% ($) and 27.11% (€) year to date.
(press release 8-October-2010)
Diva Synergy is managed by the three portfolio managers Lionel Melka, Amit Shabi and Sebastien Dettmar. Lionel has 10 years of experience as an M&A advisor for blue chip clients in prestigious banks such as Lazard, Calyon and LCF Rothschild. He has been involved in more than 20 major transactions totaling more than USD 50 billion. www.b-dreyfus.com