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From Sagar Chakraverty, Opalesque Asia:

The event-driven strategy definitely needs a closer look this year due to its superior performance compared to other strategies, bolstered by rallies that lifted credit and equity markets. A significant amount of deals are on the anvil but the downside at the moment is that spreads are very tight. With many firms sitting on healthy cash balances and interest rates being low, it is just a matter of time before the actual M&As start happening.

Till now, several good news from the M&A front has helped this strategy to a large extent. In March, over $200bn worth of deals were announced followed by another $140bn in April, according to the latest Credit Suisse/Tremont Monthly Hedge Fund Commentary. The CS/Tremont Event Driven index was the leader in Q1 2010, as it returned +4.8%. In April, as the index returned 1.89%, gains in the Event Driven space were driven by managers' long exposures to distressed debt and equity investments. It is now up 6.74% YTD.

The CS Tremont Q1 2010 Hedge Fund Update said that the event-driven sector had fully recovered from its 2008 losses on the back of rising investors' confidence and increased activity in the capital markets. The Event Driven......................

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