A variety of factors have held back returns from event driven strategies since the 2008 financial crisis. We believe that the underlying forces which determine corporate merger and arbitrage (M&A) activity are beginning to align very well and the consequences of a return of enthusiasm will boost the performance of such strategies.
Cerno Capital is allocating 8% of portfolio assets to global specialists who invest around announced corporate events and acquisitions.
Event driven investing encompasses a variety of strategies that all have one theme in common: organisational change. This can be in form of special situations, such as spin-offs, breakups and industry consolidations; arbitrage, evoked by mergers, exchange and tender offers to name some examples; and distressed situations such as bankruptcies, liquidations and restructurings. An event driven manager considers the fundamentals of businesses and industries to anticipate, provoke and take advantage of such situations by investing across the whole capital structure. Position size tends to hinge on a probability based analysis of various pay-offs under all possible scenarios.
As an investing strategy, merger arbitrage performs best within expanding economies with healthy corporate activity. Since 2008, global corporations have delivered and accumulated great amounts of cash on their balance sheets. Despite this, corporate activity has been relatively mute. No doubt this was partly caused by residual distrust of the US economic recovery, combined with out and out scepticism toward European fundamentals and solvency. The equity rally of last year has helped engender greater belief in economic recovery.
In the lower growth world in which we live, organic growth will be harder to achieve. This will drive corporates to look for other types of growth through identifying synergies and economies of scale, or simply buying revenue streams. Therefore, we expect that many such acquisitions, restructurings, consolidations that have been on boards’ agendas for the past few years, will now materialise, at progressively higher prices.
M&A activity has already begun to pick up in some key sectors, notably healthcare, media and telecoms. Seven US$10bn+ M&A deals were announced in the global telecom sector in 2013 which compares to just one deal in 2012, 2013 representing the highest level of activity since 2005 according to Dealogic.
For event driven funds, increased activity means a broader opportunity set and potentially increased returns. A higher quantum of deals will tend to widen spreads, as will higher interest rates. Furthermore, the complexity of transactions will rise with a higher deal count, which can present more asymmetric pay-off profiles as only the most skilled managers will be able to take advantage of these opportunities.
We believe we have identified those capable managers, who have the skill-set to assess the most complex deals and the experience to identify opportunities across the whole capital structure to deliver attractive absolute returns.
Please enter your username and password below. If you don't have a username or password,
or have forgotten your details please contact us here and we will advise accordingly.
Before accessing this section of CERNO CAPITAL PARTNERS LLP’s (“CERNO CAPITAL”) website and its contents please read these terms and conditions as they constitute a Legal Notice and contain important legal information.
CERNO CAPITAL’s website contains certain information about its approach to providing investment management services but does not provide specific investment advice and is presented for informational purposes only. It does not represent that the services described on the site are suitable for any specific investor. You are advised not to rely on any information contained in this site in the process of making a fully informed investment decision. Instead, you are urged to base investment decisions upon a thorough investigation and to obtain all necessary professional advice.
The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication or use would be contrary to local law or regulation or in which CERNO CAPITAL does not hold any necessary registration or license. Individuals or legal entities in respect of whom such prohibitions apply, whether on grounds of their nationality, their place of residence or on other grounds, must not access or use this website.
Persons who wish to access this section of the website are required by CERNO CAPITAL to inform themselves of the legal or regulatory restrictions which may affect their eligibility to access the website or subscribe for units in the funds described herein.
The information on this website is only intended to be viewed by persons who fall outside the scope of laws that seek to regulate financial promotions in their country of residence. Examples of such persons may be governmental agencies, persons sufficiently experienced in investment business to appreciate the risks associated with investment services promoted on this site, large corporations and trusts and high net worth individuals. These examples are not country specific, may not be relevant to your country of residence and are provided for illustration purposes only. If you are uncertain about your position under the laws of your country of residence then you should seek clarification by obtaining legal advice from a lawyer practising in your country of residence before accessing our site.
In particular, CERNO CAPITAL is not registered as an investment adviser with the Securities and Exchange Commission and therefore this website is neither directed at nor intended for use by any person or entity in the United States.
Any past performance data contained on this website is no indication of future performance and nothing on this website should be interpreted to state or imply otherwise. The value of investments may fall as well as rise and investors may not get back the full amount invested. In addition, the information and materials herein shall not constitute an offer or solicitation, or an offer to sell, shares of any of the funds or any advisory or management service in any jurisdiction.
Additionally, the information on this website is provided “as is” and “as available”. CERNO CAPITAL is under no obligation to update the information to reflect changes after the publication date. It is presented without warranty of any kind, either express or implied, including without limitation of any warranties concerning the availability, reliability, accuracy, completeness, timeliness or sequencing of the site or the content, products or services available on or via the website. Also, the information offered does not carry a guarantee of accuracy, completeness or timeliness for any particular purpose and neither expressly or impliedly carries warranties or implied warranties regarding its merchantability and fitness for a particular purpose.
CERNO CAPITAL reserves the right to change the information displayed on the website or this legal notice at any time. They will not be responsible for any loss or damage that could result from interception by third parties of any information available on this website. In no event shall CERNO CAPITAL be liable for any indirect, incidental, special, punitive or consequential damages (including, without limitation, damages for loss of data, business or profits) arising out of or in connection with this legal notice, the website, the inability to use the site or any products, services or content purchased, obtained or stored in or from the site, whether based on contract, tort, strict liability or otherwise, even if CERNO CAPITAL has been advised of the possibility of such damages, and notwithstanding the failure of the essential purpose of any remedy without limiting the foregoing provisions of this paragraph, these limitations also apply to any third party claims against you.
This Legal Notice is governed by English Law and the English courts shall have exclusive jurisdiction over any matter arising out of this Legal Notice or from your accessing of the website. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction.
The information contained herein does not constitute an offer to sell or the solicitation of any offer to buy or sell securities and or any derivatives and may not be reproduced, further distributed or published by any recipient without prior permission from CERNO CAPITAL.
By accessing and using the CERNO CAPITAL’s website you acknowledge that you have reviewed this Legal Notice and understand and agree to the terms and conditions contained herein.
This website has been published by CERNO CAPITAL which is authorised and regulated in the UK by the Financial Conduct Authority.
CERNO CAPITAL is a registered limited liability partnership in England and Wales (Incorporation Number OC326579), registered office: 34 Sackville Street, London, W1S 3ED.
By clicking on the “Submit” button you are stating that you are eligible to access this site and that you agree to be bound by all terms and conditions set out above, and you acknowledge that all the above information has been brought to your attention. The information contained in this website is offered to you conditional on your acceptance without modification of the terms, conditions and notices contained herein. If you do not agree with these, please do not access this website.
The Endowment Fund (hereafter “the Fund”) is an Unregulated Collective Investment Scheme (“UCIS”) for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (the ‘Act’) and as a consequence its promotion in the UK is restricted by law.
Interests in the Fund will be offered for sale only pursuant to the prospectus (offering memorandum) of the Fund and investment into the Fund may be made solely on the basis of the information contained therein.
Access to information about the Fund is intended solely for distribution to professional clients, eligible counterparties and those persons to whom the promotion of UCIS is permitted under the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 and COBS 4.12 of the Financial Conduct Authority’s Handbook. Investors may not have the benefit of the Financial Services Compensation Scheme and other protections afforded by the Act or any of the rules and regulations made there under. If you are unsure on whether you are eligible to access this section of the website, please contact our compliance officer.
There is not an active secondary market for shares in the fund. As such the only method of obtaining a return of capital may be via redemption. There may be notice periods, redemption penalties or other impediments to liquidity. In addition, some of the underlying investments contain gate clauses that prevent more than a certain percentage of investors redeeming at any one time.
By submitting your email address below you are stating that you are eligible to access this website and that you agree to be bound by all terms and conditions set out above, and you acknowledge that all the above information has been brought to your attention. The information contained in this website is offered to you conditional on your acceptance without modification of the terms, conditions and notices contained herein. If you do not agree with these, please do not access this web site.
Thank you for requesting access to our Funds pages.
We will shortly mail you a password to the email address you supplied. Should this not reach your inbox within the next 5 minutes (be sure to check your junkmail) please contact us for further assistance via our contact page.感谢您请求访问我们的基金网页。
我们会尽快将密码发送至您提供的电子邮件地址。如果 在此5 分钟后仍未收到我们的邮件（请一定要检查您的 垃圾邮件），请通过联系方式的页面联系我们并寻求进 一步帮助。