Merger Arbitrage and Event Driven Investing

In this course, participants will learn the fundamentals of arbitrage investing. Starting with the definitions of arbitrage, merger and other forms of arbitrage, the course will focus on how such portfolios are managed and the different types of positions established and traded across a variety of merger, spinoff and other types of restructuring transactions.

In particular, the course will cover stock for cash, stock for stock, combination, collar, foreign, domestic, friendly and hostile transactions. Participants will also gain an understanding of the utilization of derivatives and leverage in the portfolios discussed.

The course concludes with an examination of the key challenges, opportunities and likely future developments facing the industry.

No sessions currently available. Contact client services to get the next available date.
CPE CREDITS
7.5
Anyone charged with asset allocation to alternative investments especially arbitrage and long/short strategies and anyone considering an analyst or trader position at a hedge fund or proprietary desk pursuing arbitrage strategies.
No advance preparation required.
Students will be able to:
  • Acquire a clear understanding of what arbitrage investing is
  • Be able to calculate spreads
  • Identify and assess probabilities reflected in the primary and derivative markets
  • Demonstrate a practical knowledge of the various approaches and trading strategies associated with arbitrage investing
  • Evaluate the risks and rewards presented by market events, transactions and special situations
Participants should have a general background in securities analysis and have some familiarity with trading concepts such as short sales, and derivative instruments such as puts and calls.
What is Risk Arbitrage?
  • What is arbitrage?
  • Different types of arbitrage
  • Merger arbitrage vs. risk arbitrage and event driven investing
  • What is the spread?

Types of Merger Transactions which can be Arbitraged

  • Stock for cash
  • Sstock for stock
  • Collars and combinations
  • Foreign and cross-boarder
  • Hostile and competing bids

Portfolio Management

  • The decision process: making decisions with imperfect information
  • Probability and decision tree analysis
  • Trading strategies
  • Hedging vs. speculation
  • Puts, calls, collars, buy - writes and total return swaps
  • Diversification, concentration and risk selection
  • Domestic, international and cross-border
  • Legal, regulatory and event risk
  • Valuation risk
  • Financing risk
  • Market dynamics, stock loan
  • Interest rate risk
  • Leverage and its forms

The Opportunity Today and the Future of Arbitrage

  • Deal flow, capital flow and spreads
  • The colors of money: composition of the hedge fund investment community
  • Index replication and structured products

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.