Alternative strategies

Carmignac Portfolio Merger Arbitrage

Luxembourg SICAV sub-fundGlobal marketArticle 8
Share Class

LU2585800878

A defensive strategy focusing on merger arbitrage opportunities
  • A defensive merger arbitrage strategy that aims to provide better than money market returns, with limited correlation to equity markets.
  • An alternative strategy with a socially responsible investment approach, focusing on officially announced M&A deals in the developed markets.
Risk Indicator
2/7
Recommended Minimum Investment Horizon
3 years
Cumulative Performance since launch
+ 5.5 %
0.0 %
0.0 %
0.0 %
+ 3.4 %
From 07/11/2024
To 07/11/2024
Calendar Year Performance 2023
-
-
-
-
-
-
-
-
-
+ 2.6 %
Net Asset Value
105.55 €
Asset Under Management
54 M €
Market
Global market
SFDR - Fund Classification

Article

8
Data as of:  7 Nov 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).

Carmignac Portfolio Merger Arbitrage fund performance

Take a look at the Fund's performance supported by our Fund managers’ market commentary and strategy insight.

Our monthly comments

Data as of:  30 Sep 2024.
Fund management team

Market environment

  • After a few months of relative calm, September was marked by a return to volatility in merger arbitrage spreads.

  • The US administration's delays in the acquisition of United State Steel by Nippon Steels led to sharp swings in the US steelmaker's shares: down 23% at the start of the month, followed by a rebound of almost 20% at the end of September!

  • As usual in the wake of such an event, there was a move to reduce the risk in portfolios, which led to a widening of certain merger arbitrage spreads. The HFRX Merger Arbitrage index fell by 0.55% over the month.

  • In addition, a number of deals came to an end, leading to a tightening of spreads: These include Network International, Resurs Holding, Silk Road Medical, Walkme and Copperleaf Technologies.

  • There was also good news for two deals that were in2nd Request: SouthWestern Energy and Hess obtained FTC approval.

  • 1 deal failure to mention: in the US real estate sector, McGrath RentCorp and WillScot Holdings mutually terminated their merger plans.

  • As usual in the run-up to the US elections, the flow of new deals seems to be slowing, with only 22 announced this month (vs. 26 the previous month) for a total of $78bn.

  • This slowdown is noticeable in the US, but M&A activity remains buoyant in Europe and Asia, with annual volume growth of 13% and 75% respectively.

  • The return of private equity funds seems to be confirmed: financial operators now account for more than a third of acquirers.

Performance commentary

  • We were not invested in United State Steel, which meant that we were relatively unaffected by the renewed volatility seen in September.

  • The fund posted a positive performance over the month

  • Main positive contributors to performance were: Capri, Silk Road Medical and Resurs Holding

  • Main negative contributors to performance were: Hess, Shinko Electric Industries and Albertsons

Outlook strategy

  • The fund's investment rate was 39%, up on the previous month.
  • With 54 positions in the portfolio, diversification remains satisfactory.
  • 2024 should see a recovery in the M&A cycle, driven in particular by falling interest rates, the energy transition affecting many sectors of the economy, the return of private equity funds and changes to stock market regulations in Japan.
  • The risk premium of the Merger Arbitrage strategy currently offers investors returns that are still attractive, especially in an environment where deal failure rates remain low.

Performance Overview

Data as of:  6 Nov 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). 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.
Source: Carmignac at 07/11/2024

Carmignac Portfolio Merger Arbitrage Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  31 Oct 2024.
North America15.5 %
Europe EUR7.0 %
Europe ex-EUR6.8 %
Others5.0 %
Total % of alternative34.3 %
North America15.5 %
usUSA
12.8 %
caCanada
2.8 %

Key figures

Below are some key figures to help you understand the Fund's management and positioning.

Exposure Data

Data as of:  31 Oct 2024.
Net Equity Exposure34.3 %
Beta0.0 %
Sortino Ratio-0.8
Number of Holdings36

The strategy in a nutshell

Discover the Fund’s main feature and benefits through the words of the Fund Managers.
Fund Management Team
Our approach is based on rigorous selection of the Merger & Acquisition transactions, included in the portfolio, careful sizing of these positions and, lastly, diversification.
View Fund's characteristics
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.
Carmignac Portfolio is a sub-fund of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive.