Wed, May 27, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Merger Arbitrage demonstrates its ability to deliver positive returns in adverse conditions: Lyxor

Wednesday, May 15, 2019

Laxman Pai, Opalesque Asia:

Merger Arbitrage again demonstrated its ability to deliver positive returns in adverse conditions, Lyxor said in its weekly brief.

"This is a strategy on which we have maintained an Overweight stance over the recent quarters despite the recent underperformance," it said in a report.

M&A volumes remained strong in the U.S. in April and rebounded in Europe. Deal spreads are tight, and this is a headwind. However, the strategy is so defensive and uncorrelated with broader market movements that we strongly reaffirm the Overweight stance.

CTAs benefitted from their long fixed income positioning which helped protect portfolios. Meanwhile, L/S Credit was flat, and Merger Arbitrage managed to deliver positive returns (+0.1%).

The worst performing alternative strategy among the 240 that is monitored in this report was a Global Macro, down -3.1%.

"Going forward, the financial environment is increasingly uncertain. After the year-to-date rally in risk assets, we believe that the trade war escalation between the U.S. and China is a valid reason to take profits and reduce risk in portfolios," Lyxor said.

"We also believe that both countries will eventually find an agreement, but such agreement could take place after intense market pressure. Under such conditions, Merger Arbitrage is expected to do well. Finally, the associated fall in bond yields also supports our preference for carry strategies such as L/S Credit and EM-focused Glo......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Tiger Global tops the list US-based venture capital market[more]

    Laxman Pai, Opalesque Asia: Tiger Global Management holds on to its position as market-leader in US-based venture capital, said a study. According to Preqin, the closure of tech-focused Tiger Global Private Investment Partners XII in January means the New York-based firm has raised more than

  2. Tech: Fintech startup Brex closes $150m in pure venture funding amid recession[more]

    From Business Insider: Brex, the 3-year-old fintech unicorn, raised an additional $150 million in equity funding from existing investors and Lone Pine Capital, the company announced Tuesday. The cash infusion raised the startup's valuation to "around the $3 billion mark," cofounder and co-CEO Henriq

  3. PE/VC: Venture debt set to take prominent role, Building out Goldman Sachs's private-equity business[more]

    Venture debt set to take prominent role From PE News: Venture debt financing could be having its moment as the equity market becomes less friendly to start-ups. About $10bn worth of venture debt deals were made this year as of 21 April, a pace set to eclipse the roughly $25bn in such de

  4. Study: Emerging market bond issuers take hit as global recession deepens, The coronavirus pandemic could cost the global economy a nightmarish $82tn over 5 years, a Cambridge study warns[more]

    Emerging market bond issuers take hit as global recession deepens Increasing credit stress evident amongst many high-yield EM non-financial corporates as coronavirus disruption takes its toll, says Moody's. 74 out of 106 rated EM sovereigns have a stable outlook as of 30 April 2020 (compa

  5. Investing: Singer bets on Europe, emerging markets, Britain's unhealthy appetite for financial risk in essential services, How Stan Druckenmiller shook up his portfolio[more]

    Singer bets on Europe, emerging markets From Investment Magazine: William Blair's Brian Singer is looking to invest in Europe and the emerging markets as the recovery from the global economic shutdown to contain the pandemic will likely take longer than what the market has priced in.