December 2006
Merger arbitrage: the good environment keeps getting better
Merger arbitrage has been one of the top-performing strategies of 2006. Paulson & Company is a leading light in merger arbitrage, with well-honed skills in both long and short strategic approaches to deals. Helen Avery reports.
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John Paulson: “Some of the most profitable trades we have done have been on the short side” |
John Paulson is regarded by many in the market as the king of merger arbitrage. He started his fund, Paulson & Company, in 1994, after a career with Bear Stearns in M&A and then as a partner at Gruss & Partners. His fund management firm now has more than $6 billion in assets.
Merger arbitrage has been one of the top-performing strategies of 2006. As of the end of October, the HFRI merger arbitrage index had returned 11.76% year to date, and such high returns could well be expected to continue into 2007 as M&A activity continues to be strong.
“This year there has been a significant amount of merger activity in Europe, fuelled by the desire of companies to get bigger than their home market allows,” says Paulson. “In...
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