Eventdriven strategies are equity oriented strategies involving investments, long or short, in the securities of corporations undergoing significant change such as spinoffs, mergers, liquidations, bankruptcies and other corporate events. Market efficiency and hedge fund trading strategies edhec risk. Event driven hedge fund strategies linkedin slideshare. Eventdriven hedge fund strategies oxford scholarship. Hedge funds strategies market trend strategies event driven strategies arbitrage strategies multi strategy. Longshort equity and eventdriven strategies may have less beta exposure than simple, longonly beta allocations. Thats because traditional equity investors, including managers of. Equity long bias, emerging market, cdo, and event driven with returns ranging from 5,38% to 3,76%. An eventdriven strategy is a type of investment strategy that attempts to take advantage of temporary stock mispricing, which can occur before or after a corporate event takes place. Event driven strategies hedge funds all hedge funds source.
Deutsche bank alternative investment survey dyment et al. Exploring the benefits of equity eventdriven strategies ubs. Merger arbitrage is a kind of eventdriven strategy, which can also involve distressed companies. Hedge funds are an important subset of the alternative investments space. This chapter explores some of the strategies used by eventdriven hedge funds, namely merger arbitrage, trading distressed securities, special situations, and activism. The facts event driven strategies funds in focus event driven strategies funds in focus we focus on event driven strategies hedge funds, including a breakdown of substrategies utilized and where the. Some argue that investing in hedge funds is a key way to access the very best investment. Type of hedge funds fund of funds managed accounts single manager funds.
Hedge fund strategies range from longshort equity to market neutral. These are primarily hedge funds, private equity firms and some mutual funds. Event driven investment managers maintain positions in companies currently or prospectively involved in corporate transactions including mergers. Exploring the benefits of equity eventdriven strategies.
This chapter explores some of the strategies used by eventdriven hedge funds, namely merger arbitrage, trading distressed securities, special situations, and. Eventdriven investing strategies are typically used only by large institutional investors, such as hedge funds and private equity firms. This involves eventdriven managers seeking to profit from security pricing inefficiencies that can occur when companies are. Hfr hedge fund strategy definitions event driven hedge. On the other hand, the least profitable strategies in 2019. The camelot eventdriven fund aims to deliver a traditional hedge fund strategy to mutual fund investors. Success of event driven trading depends on successful prediction of whether various catalyst events will in fact occur or be finalized. Event driven strategy definitions strategy is the realization of an event at the corporate level. Change in status or delay of events may affect the price of securities purchased. Hedge fund managers perform better when entry barriers to the strategy are high.
Profits from the markets lack of understanding of the true value of the deeply. This involves eventdriven managers seeking to profit from security pricing inefficiencies that can occur when companies are involved in a range of corporate events, which includes takeovers, restructures, mergers, capital raising, share buybacks, spinoffs, asset sales, liquidations, bankruptcy, capital returns and many others. The multiple strategies of hedge funds investopedia. This is due to the large amount of expertise necessary in analysing corporate events to execute the strategy successfully. Event driven investment strategies hedge fund strategies. The credit substrategies may be driven by companyspecific events, but they may also be driven by changes in the way the market perceives. An event driven strategy is a type of investment strategy that attempts to take advantage of temporary stock mispricing that can occur before or after a corporate. It is most often used by private equity or hedge funds because it requires necessary expertise to analyze corporate events for successful execution.
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