With 2017 proving another strong year for mergers and acquisitions (M&A) volumes, Event Driven investors will be forgiven for being disappointed with mediocre, although positive returns at the index level. However, underneath this, several funds turned in strong years in 2017 with others falling substantially. Indeed, returns ranged from -19.0% to +19.5% in 2017, proving how diverse the Event Driven sector is. To help investors navigate this, we categorise funds into three sub-groups: Merger Arbitrage, Merger Event, and Event Driven. This note explores the differences between these sub-indices as well as highlighting some of the funds available in this space.
As the wider alternative UCITS sector continues to evolve, 2017 was an eventful year for the UCITS platform market. Launch activity was particularly strong, and a number of funds switched their platform providers against a backdrop of generally increasing competition. The business models behind third party UCITS platforms also evolved over the year, and there is now an increasingly clear distinction between the different types of platforms, and the revenue models underpinning them. In our view, this has important knock-on consideration for funds looking to launch on platforms.
Our monthly performance report highlights the ten best and worst performing funds in each strategy, both for the prior month and the year to date. Featured funds this month include:
KLS Sloane Robinson Emerging Markets
For the full report, please download below:
At its heart a catalyst driven strategy designed to profit from mispriced securities that are subject to corporate events including restructurings, M&A, and spinoffs.The UCITS driven sector is relatively well populated by funds, however there is a lack of credible, multi-strategy event driven funds with Boussard & Gavaudan’s offering one of the more interesting options available in the market. We particularly like the combination of traditional arbitrage techniques with derivative implementation, which through time should lead to a return stream that is uncorrelated to traditional asset classes while exhibiting moderate volatility and drawdown.
Strategy Research - Event Driven
Third Party UCITS Platforms - 2017 Update
Monthly Fund Performance Report - December 2017
Boussard & Gavaudan Absolute Return
AH UCITS Index
|AH Global Index||0.20||1.4||0.0||3.6||3.6|
|AH Credit Index||0.05||0.4||0.0||1.5||1.5|
|AH Equity Long / Short Index||0.46||1.6||0.0||6.9||6.9|
|AH Event Driven Index||0.54||0.5||0.0||1.5||1.5|
|AH FX Index||0.19||0.2||0.0||-3.8||-3.8|
|AH Macro Index||-0.28||1.4||0.0||1.7||1.7|
|AH Managed Futures Index||0.43||4.4||0.0||2.6||2.6|
|AH Market Neutral Index||-0.10||0.9||0.0||1.4||1.4|
|AH Multi Asset Index||0.60||1.4||0.0||6.2||6.2|