Carmignac has launched Carmignac Portfolio Merger Arbitrage and Carmignac Portfolio Merger Arbitrage Plus, two merger arbitrage funds with different risk-return profiles, which will be available to both professional and retail investors in several European countries.
Carmignac has been expanding its capabilities in alternative investments for several years. The addition of a merger arbitrage team, through the appointment of fund managers Fabienne Cretin-Fumeron and Stéphane Dieudonné in February 2023, responds to the growing demand from investors to diversify their portfolio from traditional asset classes towards those offering reduced volatility and uncorrelated sources of returns.
“In this challenging environment of rising interest rates and market volatility, merger arbitrage is one of the few strategies that are positively correlated to rising rates, offering an attractive risk/return solution to our clients.”Fabienne Cretin-Fumeron and Stéphane Dieudonné.
Carmignac’s merger arbitrage funds seek to benefit from announced mergers and acquisitions by investing across developed markets. The aim is to generate a return by taking advantage of the spread between a target company’s share price and the offer price, selecting deals that the team believes have the best chance of success (and therefore of hitting the offer price). As such, the team’s investment process focuses on in-depth analysis of each merger deal to identify all factors that could lead to a deal’s failure. While, on average, 7% of M&A deals fail, the fund managers have managed to halve this risk thanks to their rigorous investment process. Fabienne and Stéphane benefit from a 19-year consecutive public track record of managing a successful merger arbitrage strategy together.
“We are committed to offering investors looking to diversify their portfolio access to the most attractive and differentiated asset classes. With these attractive non-correlated merger arbitrage funds, investors will benefit from Fabienne and Stéphane’s proven track record and risk management skills.”Maxime Carmignac, Managing Director of Carmignac UK and head of strategic product development at Carmignac.
Carmignac Portfolio Merger Arbitrage has a defensive profile with expected volatility of 2% to 4%, while Carmignac Portfolio Merger Arbitrage Plus is a more dynamic fund, with expected volatility of 5% to 7%. Both funds are absolute return strategies and are classified as compliant with Article 8 of the SFDR regulation.
Subscription to the funds is available in Austria, Belgium France, Germany, Italy, Ireland, Luxembourg, Portugal, the Netherlands, Singapore, Spain, Sweden, and the United Kingdom.