Monday, April 27, 2009

The Merger Fund: The 'Poor Man's Hedge Fund'? -

The Merger Fund: The 'Poor Man's Hedge Fund'? -
"If you really want to diversify, you need to spread your money across a variety of funds investing in different asset classes, managers and strategies, from bonds to absolute return strategies to, say, precious metals or covered call funds. The Merger Fund is completely specialized, and that's the appeal of the thing.

'We're all merger arbitrage,' says manager Roy Behrens. 'That's all we do here.'

That means they try to profit from shares involved in takeover deals. After all, deals are complex: Regulators can block them, boards and shareholders can revolt, rivals can jump into the fray. Merger arbitrage specialists comb the possibilities and the share prices for opportunities."

Interesting piece. Talks about correlation, arbitrage, diversification, market efficiency, and more.

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