KLS Athos Event Driven

In 2023, there was a notable withdrawal of global event-driven capital from Asian situations, leading to increased short-term volatility in spreads and dislocations in several of Athos' special situations and Holdco trades. Despite these challenges, Athos capitalized on the situation by increasing exposure in conviction trades towards the end of the year, helping to support PnL. Looking forward to 2024, Athos maintains a high overall gross exposure, aiming to leverage the persistently attractive opportunities in the market. They anticipate that Asian merger spreads will stay elevated in the near to medium term due to the current market environment and beyond their core focus on mergers, a number of supplementary return drivers Athos utilise look attractive this year. Equity Capital Market activity, which was subdued in 2023, is expected to increase as companies seek funding amidst rising debt capital costs while in Japan, recent reforms in corporate governance are likely to boost event-driven situations. Furthermore, undervalued assets in China and those related to China are expected to stimulate corporate activity. This is particularly relevant in the context of companies with significant dominant shareholders, who have historically shown a tendency to privatize companies when valuations are low, as they currently are.