Hedge funds look to exploit M&A pick-up
Huge moves in currency markets look set to provide one group of hedge fund managers with a rich seam of trading opportunities again.
So-called merger arbitrage funds, which bet on the likelihood of corporate mergers and acquisitions closing, have had fewer deals to trade this year as global economic uncertainty and higher interest rates have weighed on dealmaking.
But the dollar’s relentless march higher against sterling, the yen and the euro could change all this. With dollar-based companies or funds now able to pick up foreign companies for a lot less than before, “everything in the UK is on sale”, as one US private equity executive put it this week. Merger arbs smell an opportunity.
This story originally appeared on: Financial Times - Author:Laurence Fletcher
