From Lyxor Aset Management: The Event Driven space also produced solid results in October. Special Situation funds returned 1.1% (10% YTD). These funds are becoming like more traditional L/S equity managers. They maintained a net equity exposure at 44% and net credit exposure of 19%. Merger Arbitrage funds were up 1.4% but managers reduced risk, with net exposure down from 61% to 43%, suggesting less directional views.
From Financial Risk Management Limited: Event Driven managers once again recorded a solid month in October, continuing a pattern we have seen for the most part this year. Deal volumes remained in the range they have been for most of the year (ignoring the mega Vodafone deal), with several large popular deals completing over the month. Both managers that we speak to, as well as Investment Banks, are suggesting that there is far less activity now in the pipeline as we head towards year end. The one area that seems to be bucking this trend is European telecommunications. There have been several large deals in the sector already this year, and there is room for further consolidation. We are not overly concerned about the outlook for managers from here; although there is less activity forecast, this is an area that is notoriously difficult to predict. Managers also have a knack of generating returns even in supposedly difficult conditions.
From GFIA: Event-driven strategies continued their strong outperformance in September, with many of the managers continuing to deliver respectable returns. Late stage, hard catalysts transactions have contributed handsomely to Athos Asia Event Driven (1.24%) fund which continues to see a high gross exposure (360%) given the expected healthy number of M&A closures over the remainder of the year. York Asian Opportunities (2.0%) continues to churn out remarkable returns from their special situations book with China and Japan being the two main performance contributors. Ardon Maroon (4.1%) also derived 2.5% from Japan hard events and overall, the portfolio has 36.7% and 62.0% in hard and soft events respectively.
The Event-Driven Asset Class in a Rising Rate Environment (Nov 2013)