The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Hedge funds: A strategy for all seasons

The event driven hedge fund strategy has fared well during the global financial crisis and, despite a difficult second quarter this year, looks set to continue outperforming other strategies

This article appears courtesy of Global Investor



While extreme market volatility during the global financial crisis saw many investors run for cover and seek a safe haven for their capital, it was also a time that had event driven hedge fund managers rubbing their hands in anticipation of the opportunities in front of them.


The event driven strategy involves investments, long or short, in the securities of corporations undergoing significant change. And there have been no shortage of major changes since September 2008.


Such ‘events’ often provide managers with a tangible catalyst by which they may be able to realise the expected change in value in the underlying security. Substantial profits can be generated by managers who correctly analyse the impact of the anticipated corporate event, predict the course of restructuring and take positions accordingly. Two years later, these opportunities are still being presented thick and fast.


In the first quarter of this year the even driven sector posted returns of 4.8%, according to the Credit Suisse Tremont Hedge Fund Index, which were the best results of any type of fund.


“A lot of first quarter returns were pretty impressive in the event driven space,” Paul McCauley, Portfolio Strategist at International Asset Management told Global Investor/isf.







You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree