Investment Approach

We seek to generate superior risk-adjusted returns by capitalizing on the discrepancy between a security’s current price and the value implied by an announced transaction. We also invest in companies undergoing other types of significant change that are expected to result in materially different valuations.  We seek to enhance returns and manage risk by optimizing position size at critical points throughout a position’s holding period and, when appropriate, through the creative use of derivatives.

We attempt to be discriminating in our stock selection process.  Our portfolio does not represent an index of all M&A activity. We evaluate each deal on its own merits and considers whether proposed combinations have sound financial and strategic footing. In addition, we strive for a clear understanding of a deal’s downside and the proposed transaction’s timeline. We go to great lengths in understanding the deal terms, legal and regulatory risks, merger agreement conditions and performance requirements of both parties involved in the announced deal.

Our event driven strategy focuses on companies undergoing extraordinary change that may bring to light a materially different valuation consensus both long and short. These situations include but are not limited to catalysts such as restructurings, spin-offs, activist involvement, management change, corporate auctions, regulatory change, recapitalizations and liquidity events. As with each of our investments, our event driven holdings have targeted downsides and timelines. Event driven positions are typically hedged with sector or market instruments.