Merger arbitrage grows

Market-neutral managers that survived the difficult conditions of 1998 enjoyed a good year in 1999, ...

Market-neutral managers that survived the difficult conditions of 1998 enjoyed a good year in 1999, according to research by Global Fund Analysis. A common explanation cited by managers was less capital was competing for trades in their strategy, allowing them to reduce leverage and still make their target return, typically in the low teens after fees. Owen Brolley, senior analyst at Global Fund Analysis, said: "A welter of corporate activity gave equity-based strategies ample opportunity to generate good risk-adjusted returns. Merger arbitrage, event-driven and relative value strategies ...