Carmignac Portfolio Merger Arbitrage Plus: Letter from the Fund Managers - Q2 2026

Author(s)

Fabienne CRETIN-FUMERON,Stéphane DIEUDONNÉ

Published on

14 July 2026

Read time

2 minute(s) read

Dear investors,

During the second quarter of 2026, despite a volatile market, Carmignac Portfolio Merger Arbitrage Plus (I EUR Acc share class) delivered a positive performance of +0.61%.

Market environment

During the second quarter of 2026, markets remained volatile, with both equity and credit assets continuing to be affected by geopolitical uncertainty, renewed pressure on energy prices and lingering concerns around parts of the private credit market. Risk appetite remained fragile through April and May, before improving somewhat later in the quarter as investors became more selective and market stress became increasingly idiosyncratic rather than broad-based.

In this environment, merger arbitrage remained broadly resilient, supported by the strategy’s limited directional exposure to equity and credit markets. However, the quarter was marked by significant dispersion across deal spreads. Several situations remained under pressure, including transactions exposed to regulatory approvals, geopolitical risk or delayed closing timelines. Allied Gold, Subsea 7, Warner Bros and certain financial-sector deals experienced periods of spread widening or profit-taking, often without a material deterioration in deal fundamentals.

M&A activity remained healthy over the quarter. Deal volumes were broadly stable in April and May, before accelerating in June, with 25 new transactions announced for a total value of around USD 138 billion. Activity remained concentrated in North America and was supported by several sizeable transactions, including deals in communication services, healthcare, energy and consumer sectors.

Overall, despite a still uncertain macro backdrop and continued volatility across equities and credit, merger arbitrage remained primarily driven by deal-specific catalysts. The quarter highlighted both the importance of selectivity in managing regulatory and geopolitical risks, and the continued availability of attractive opportunities as M&A activity recovered into the quarter end.

Performance review

The M&A strategy demonstrated resilience during the quarter as spreads continued to be driven by idiosyncratic, deal-level catalysts rather than directional equity or credit markets. While market volatility led to temporary spread widening in certain names, this did not reflect higher deal break risk. Quarterly performance was driven by:

Completion of several big deals: Cantaloupe, Hologic and American Woodmark.
Performance was also pressured by Allied Gold, whose acquisition by China’s Zijin Mining saw its spread widen amid heightened execution concerns regarding geopolitical tensions in Mali and the pending Chinese antitrust approval.
M&A pipeline remained robust. Global transaction values were up around 30% year over year according to Bloomberg data.
Importantly, our deal selection avoided any transaction failures during the quarter.

That said, a handful of spreads proved more volatile than average, detracting modestly to quarterly performance, notably Warner Bros, Norfolk Southern and International Money Express.

Outlook

M&A activity remains well supported despite a more uncertain macro and geopolitical backdrop. The recent wave of large transactions reflects renewed corporate confidence, with companies continuing to pursue scale, synergies and strategic positioning. We expect this momentum to continue in H2 2026, supported by a more pragmatic US antitrust environment and still attractive financing conditions for strategic buyers.

Financial sponsors are also increasingly active, backed by significant dry powder and growing pressure to deploy capital. Improved credit market conditions should continue to support private equity activity, including larger and more complex transactions.

Against this backdrop, merger arbitrage offers an attractive opportunity set. Elevated deal flow, wider spreads and a more supportive execution environment create visible risk-adjusted return potential, while the strategy’s exposure to idiosyncratic corporate events provides useful diversification in markets still marked by uncertainty and elevated correlations. We believe the Fund is well positioned to capture these opportunities.

The Merger Arbitrage Team

Source: Carmignac, Bloomberg. Data as of 30/06/2026.

Carmignac Portfolio Merger Arbitrage Plus I EUR Acc

ISIN: LU2585801330

Recommended minimum investment horizon: 3 years

Risk indicator*: 2/7

SFDR - Fund Classification**: Article 8

*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.

Main risks of the fund

Equity: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.

Arbitrage: Arbitrage seeks to benefit from such price differences (e.g. in markets, sectors, securities, currencies). If arbitrage performs unfavorably, an investment may lose its value and generate a loss for the Sub-Fund.

Risk associated with the Long/Short Strategy: This risk is linked to long and/or short positions designed to adjust net market exposure. The Fund may suffer high losses if its long and short positions undergo simultaneous unfavourable development in opposite directions.

Liquidity: Temporary market distortions may have an impact on the pricing conditions under which the Fund might be caused to liquidate, initiate or modify its positions.

The Fund presents a risk of loss of capital. Please refer to the Fund’s prospectus to view the exhaustive list of risks.

Fees

ISIN: LU2585801330

Entry costs: We do not charge an entry fee.

Exit costs: We do not charge an exit fee for this product.

Management fees and other administrative or operating costs: 1.12% of the value of your investment per year. This estimate is based on actual costs over the past year.

Performance fees: 20.00% max. of the outperformance if the performance is positive and the net asset value exceeds the high-water mark. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years, or since the product creation if it is less than 5 years.

Transaction Cost: 0.23% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell.

Performance

ISIN: LU2585801330


Carmignac Portfolio Merger Arbitrage Plus	+1.6	+4.6	+3.7	+3.2


Carmignac Portfolio Merger Arbitrage Plus	+3.5%	+4.6%	+4.1%

Source: Carmignac at 30 Jun 2026.
Date of 1st NAV : 14/04/2023.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The Fund presents a risk of loss of capital.
The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.

Reference Indicator: -

Share our page via Linkedin

Share our page via X / Twitter

Share our page via Facebook

Download the PDF document

Share our page via Email

Were you satisfied with this article?

Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions. This document is intended for professional clients.

This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents.

Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.

Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.

Morningstar Rating™ : © Morningstar, Inc. All Rights Reserved. The information contained herein: is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Access to the Funds may be subject to restrictions regarding certain persons or countries. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the material or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not access this material. Taxation depends on the situation of the individual. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA.
The risks, fees and ongoing charges are described in the KID (Key Information Document). The KID must be made available to the subscriber prior to subscription. The subscriber must read the KID. Investors may lose some or all their capital, as the capital in the funds are not guaranteed. The Funds present a risk of loss of capital.

The Funds’ prospectus, KIDs, NAVs and annual reports are available at www.carmignac.com/en, or upon request to the Management Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law.

In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at www.carmignac.com/en-gb, or upon request to the Management Company, or for the French Funds, at the offices of the acilities Agent, Carmignac UK Ltd, 2 Carlton House Terrace, London, SW1Y 5AF. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.
In Switzerland: the prospectus, KIDs and annual report are available at www.carmignac.com/en-ch, or through our representative in Switzerland, CACEIS (Switzerland), S.A., Route de Signy 35, CH-1260 Nyon. The paying agent is CACEIS Bank, Montrouge, Nyon Branch / Switzerland, Route de Signy 35, 1260 Nyon.
In Belgium: This document is intended for professional clients. This content has not been validated by FSMA. The decision to invest in the promoted fund should take into account all its characteristics or objectives as described in its prospectus. This communication is published by Carmignac Gestion S.A., a portfolio management company approved by the Autorité des Marchés Financiers (AMF) in France, and its Luxembourg subsidiary Carmignac Gestion Luxembourg, S.A., an investment fund management company approved by the Commission de Surveillance du Secteur Financier (CSSF). “Carmignac” is a registered trademark. “Investing in your Interest” is a slogan associated with the Carmignac trademark. This document does not constitute advice on any investment or arbitrage of transferable securities or any other asset management or investment product or service. The information and opinions contained in this document do not take into account investors’ specific individual circumstances and must never be interpreted as legal, tax or investment advice. The information contained in this document may be partial and could be changed without notice. This document may not be reproduced in whole or in part without prior authorisation. The risks and fees are described in the KID (Key Information Document). The prospectus, KID, the net asset-values and the latest (semi-) annual management report may be obtained, free of charge, in French or in Dutch, from the management company (tel. +352 46 70 60 1) or by consulting its website or www.fundinfo.com. These materials may also be obtained from Caceis Belgium S.A., the financial service provider in Belgium, at the following address: avenue du port, 86c b320, B-1000 Brussels. The Fund (fonds commun de placement or FCP) is a common fund in contractual form conforming to the UCITS Directive under French law. Access to the Fund may be subject to restrictions regarding certain persons or countries. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. In case of subscription to a fund subject to Article 19bis of the Belgian Income Tax Code (CIR92), the investor will have to pay, upon redemption of his or her shares, a withholding tax of 30% on the income (in the form of interest, or capital gains or losses) derived from the return on assets invested in debt claims. Distributions are subject to withholding tax of 30% without income distinction. In case of subscription in a French investment fund (fonds commun de placement or FCP), you must declare on tax form, each year, the share of the dividends (and interest, if applicable) received by the Fund. Any complaint may be referred to complaints@carmignac.com or CARMIGNAC GESTION - Compliance and Internal Controls - 24 place Vendôme Paris France or on the website www.ombudsfin.be.

The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights at section 5 entitled "summary of investor rights" on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden. Belgium (French) ; Belgium (Dutch)

For Carmignac Portfolio Long-Short European Equities: Carmignac Gestion Luxembourg SA in its capacity as the Management Company for Carmignac Portfolio, has delegated the investment management of this Sub-Fund to White Creek Capital LLP (Registered in England and Wales with number OCC447169) from 2nd May 2024. White Creek Capital LLP is authorised and regulated by the Financial Conduct Authority with FRN : 998349.

Carmignac Private Evergreen refers to the Private Evergreen sub-fund of the SICAV Carmignac S.A. SICAV – PART II UCI, registered with the Luxembourg RCS under number B285278.