After Strong 2016, Merger Arb Hedge Funds See Rise In Assets

Arbitrage strategies have seen the largest growth year to date, according to a Eurekahedge report, as merger arbitrage Hedge Funds often engaged in buying and selling around mergers and acquisitions outperformed the general hedge fund industry in 2016. As the strategy looks to potentially fewer arbitrage opportunities, Eurekahedge considers the weak correlations between the S&P Merger Arbitrage Index relative to its better performing version.

Merger Arbitrage Hedge Funds basics

With assets under management in the arbitrage strategy up 6.33% year to date yet strategy returns only up 1.99% over the same period, the strategy that is often based on the completion of a merger can face unpredictable hurdles.

Issues such as...