Event Driven Investing

Merger Arbitrage as Diversification Strategy

By |April 14th, 2023|Event Driven Investing, Research Insights, Larry Swedroe|

Merger arbitrage is an investment style in which investors seek to buy shares of firms that are acquisition targets with the objective of realizing the difference between the amount for which the target is being acquired and the stock price of the target shortly after the acquisition is announced. The stock price of the target company typically sells below the acquisition price, reflecting the uncertainty of the deal being completed (the arbitrage spread). Betting on mergers is a classic hedge fund arbitrage strategy.

Litigation Finance as Alternative Investment

By |August 11th, 2022|Event Driven Investing, Research Insights, Larry Swedroe, Academic Research Insight|

Litigation finance is a rapidly growing niche asset class focused on debt and equity investments in litigation claims and law firms. We find that in-sample returns in the space have been in excess of 20% annually with limited correlation to other investment areas. This apparent excess return may be due to information asymmetry and barriers to entry in the space. Our findings highlight the opportunities and risks for investors in this nascent asset classes and suggest such excess returns are due in part to limits to the speed with which efficient markets take hold.

Financial Media, Price Discovery, and Merger Arbitrage

By |August 16th, 2021|Event Driven Investing, Research Insights, Basilico and Johnsen, Academic Research Insight, AI and Machine Learning|

Financial Media, Price Discovery, and Merger Arbitrage Buehlmaier and ZechnerReview of Finance, forthcomingA version of this paper can be found hereWant to read our summaries of academic finance papers? Check out our Academic Research Insight category What are [...]

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