Neuberger Berman Event Driven Fund

Investment Objective

The fund seeks to provide a market neutral, style factor minimized approach to event-driven investing with the goal of generating alpha driven absolute returns uncorrelated to broader markets. The fund dynamically allocates capital to three primary sub-strategies based on risk/reward: Risk Arbitrage ("Risk Arb"), Market Neutral Catalyst ("MN Catalyst"), Equity Capital Markets ("ECM")

Reference Index

S&P 500

Latest Meeting Note

Meeting 18 Apr 2023

The Neuberger Berman Event Driven Fund aims to generate alpha-driven returns with low correlation to broader equity markets. The portfolio is constructed from three strategies: merger arbitrage, market neutral catalyst, and equity capita...

The Neuberger Berman Event Driven Fund aims to generate alpha-driven returns with low correlation to broader equity markets. The portfolio is constructed from three strategies: merger arbitrage, market neutral catalyst, and equity capital markets. The strategy is managed by the NB PSG team, led by Joe Rotter, who served as Global Head of Event Driven Investments at Citadel before joining NB in 2016. The team leverages NB's institutional resources, research capabilities, management access, and technology/trading infrastructure, which provide significant benefits for executing the strategy. Market neutral catalyst is the primary allocation and often represents 80-120% gross exposure. The strategy seeks to identify companies undergoing or expected to undergo corporate change, which is anticipated to be the primary driver of return. They aim for a low-teens investment hurdle on an unlevered basis while maintaining beta neutrality and minimizing style exposure. The portfolio typically includes 25-40 related positions. The remaining strategies fall under the risk arbitrage category, which usually constitutes 30-90% gross exposure across 10-20 positions. They either go long or short on spreads throughout a transaction, based on a dynamic view of risk/reward, focusing on mispriced risk versus potential reward. Interestingly, they research and trade multiple intermediate "mini-events" during a deal's lifecycle. The strategy employs a dynamic allocation of capital to achieve the best risk-adjusted returns. In a steady state, the portfolio is typically 120% to 150% invested, focusing on constructing the optimal risk-adjusted opportunity set and allocating only to compelling risk arbitrage opportunities. In a more attractive arbitrage environment, the portfolio is generally 150% to 200% invested, with a higher allocation to risk arbitrage and maintaining a low cross-correlation between sub-strategies. This approach allows for capitalizing on various market conditions while mitigating risks through diversification. The fund launched in UCITS in October 2022 and is generally run pari passu to the offshore, except during times of stress or opportunity when they may invest heavily in a specific position to capitalize (which would not fit within UCITS sizing rules).

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2023 0.4 0.4 0.7 0.1 0.5 0.6 0.8 0.4 0.3 0.1 0.2 0.5 0.9
2022 0.4 1.0 0.1 0.5 0.5 0.8 0.8 0.2 0.1 0.2 0.3 0.1 0.4

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