Carlson Capital’s Black Diamond Arbitrage Partners Funds Sees Opportunity In This Merger [Exclusive]

Carlson Capital's Black Diamond Arbitrage Partners fund lost -0.68% net of fees in the fourth quarter of 2022 and -0.46% for 2022 as a whole, according to a copy of the firm's fourth-quarter investor letter, which Hedge Fund Alpha has been able to review.

Despite recording a loss for the year, the fund still substantially outperformed wider equity markets - the S&P 500 lost more than 18% in 2022.

But, as the firm's managers note in the fourth quarter update, with a "twenty-year-plus track record of positive absolute performance" last year's loss was disappointing.

Investments Outperform in Down Market

Carlson's merger arbitrage investments detracted 40 basis points from its returns in the fourth quarter, while special situations and other event-driven positions detracted 16 basis...