Will cross-border M&A pick-up on Trump's promise of relaxed regulation?

As equity valuations appear ever more stretched, and with rate rises in the US imminent and geopolitical concerns increasingly in focus, one hedge fund strategy in particular stands out as compelling.

Merger arbitrage typically exhibits low correlation to markets. It is a good diversifier in times of market stress, and tends to benefit from rising interest rates. The current political environment has also created some strong tailwinds, such as US tax reform. The Trump administration has made corporate tax reform a priority. While the exact details of the proposed reforms are unknown, lower corporate taxes and favourable terms to repatriate foreign assets would build a sizeable pool of cash that could be used for M&A activity. Trump appoints Carl Icahn as special adviser on re...