Carmignac Portfolio Merger Arbitrage Plus: Letter from the Fund Managers - Q3 2026

Author(s)

Fabienne CRETIN-FUMERON,Stéphane DIEUDONNÉ

Published on

October 14, 2026

Read time

2 minute(s) read

Dear investors,

During the third quarter of 2026, the fund navigated an active but differentiated M&A environment, marked by significant dispersion across individual transactions. In this context, Carmignac Portfolio Merger Arbitrage Plus (I EUR Acc share class) delivered a positive performance of +0.41%.

Market environment

During the third quarter of 2026, equity and credit markets remained volatile amid persistent geopolitical uncertainty and uneven macroeconomic visibility. In this environment, merger arbitrage continued to demonstrate resilience, supported by its limited directional exposure to broader markets. However, deal spreads showed significant dispersion, reflecting higher sensitivity to idiosyncratic factors such as regulatory risk, financing conditions and shareholder approvals.
For merger arbitrage investors, this environment remains constructive: deal flow continues to replenish the opportunity set, while spread dispersion increases the importance of disciplined transaction selection and risk management.

Performance review

Carmignac Portfolio Merger Arbitrage Plus navigated the quarter against a backdrop of significant dispersion across individual transactions. Performance was driven primarily by deal-specific developments rather than directional moves in equity and credit markets.

The main developments during the quarter included:

Competitive bidding provided additional upside: Kakaku.com benefited from a bidding war between Bain Capital and EQT, while Poste Italiane increased its offer for Telecom Italia by 3%. These developments highlight continued competition for attractive assets and the potential for improved deal terms to generate additional upside.
Deal failures remained idiosyncratic: the acquisitions involving Allied Gold and Element Solutions were terminated due to transaction-specific regulatory and shareholder-related issues. Against an otherwise active M&A backdrop, these isolated setbacks reinforce the importance of diversification, disciplined deal selection and active risk management.
Regulatory developments provided positive catalysts: Warner Bros Discovery recovered strongly as expectations of a negotiated resolution improved. The spread tightened materially following the September settlement announcement and subsequent court approval, which removed a key remaining obstacle to closing. Allfunds also contributed positively, supported by progress in the antitrust review process.

Overall, the quarter demonstrated the benefits of maintaining a highly diversified portfolio, with around 60 to 62 positions throughout the period, helping the Fund navigate transaction-specific volatility while retaining exposure to positive deal catalysts.

Outlook

The outlook for merger arbitrage remains constructive. Companies continue to pursue growth opportunities. A more flexible approach from regulators and the search for critical scale in the age of artificial intelligence are supporting M&A activity, while strong corporate earnings and cross-border transactions provide further momentum.

Importantly, the competitive dynamics observed during the quarter are encouraging. Improved bids demonstrate that buyers remain willing to deploy capital for attractive assets, creating the potential for additional value creation beyond initial transaction terms.

Against this backdrop, merger arbitrage continues to offer an attractive and diversified opportunity set driven primarily by idiosyncratic corporate events. The Fund remains well positioned to capture opportunities arising from continued M&A activity and deal-specific catalysts.

The Merger Arbitrage Team

Source: Carmignac, Bloomberg. Data as of 30/09/2026.

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	+2,0	+4,6	+3,7	+3,2


Carmignac Portfolio Merger Arbitrage Plus	+2,9 %	+3,8 %	+3,9 %

Source: Carmignac at Sep 30, 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: -

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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.

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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.
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