The growth of the European merger arbitrage industry continues with the launch of a Dublin-domiciled...
The growth of the European merger arbitrage industry continues with the launch of a Dublin-domiciled fund from LibertyView, a subsidiary of CPR Alternative Asset Management (CPRAM).
The fund will be managed by Valerie Anderson, formerly an analyst on the merger arbitrage desk at Morgan Stanley in New York.
Bernard Dennery, director of CPRAM, said: "There are relatively few merger arbitrage funds that concentrate purely on Europe. We already have expertise of running this asset class in the US, but as a European-based organisation we feel we can add value in Europe through our local expertise.
"M&A activity is strong in Europe, but it can be confusing for outsiders as regulations differ from country to country, constraints are imposed by the EU and there are often also political factors."
The fund aims to be market neutral, have low volatility and low leverage. The asset class will appeal to institutions and high net worth individuals as part of a portfolio, Dennery said.
It will invest only in publicly announced transactions involving the purchase, sale or merger of one European company by another. It can also invest in transactions involving one European company and a non-European counterpart.
The fund is among the first to take advantage of Dublin's recent change of attitude on the use of prime brokers by hedge funds, according to Dennery.
He said: "The Irish formerly wanted hedge fund assets to be placed with a trustee locally and would not accept a prime broker as sub-custodian. The Central Bank's change of stance means we can now use a prime broker.
"As a result, we are pleased to be able to domicile this fund in Dublin. The fact it is supervised by the Central Bank adds an extra layer of comfort for investors and institutions in particular, many of whom may have been uncomfortable with the idea of a Cayman-domiciled vehicle."
To be seeded in stages by parent company Banque CPR with around e40m, the fund will be available to outside investors from 1 October.
Minimum investment is e500,000. The charges will be 1.5% annual with a 20% performance fee.
Underperformance still present – for now
Regtech or fintech
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year