CHAPTER 9
Event-Driven Strategies
EVENT-DRIVEN INVESTMENT STRATEGIES, or “corporate life cycle investing,” are based on investments in opportunities created by significant transactional events, such as spin-offs, mergers and acquisitions, industry consolidations, liquidations, reorganizations, bankruptcies, recapitalizations, share buybacks, and other extraordinary corporate transactions. Event-driven trading involves attempting to predict the outcome of a particular transaction as well as the optimal time at which to commit capital to it. The uncertainty about the outcome of these events creates investment opportunities for managers who can correctly anticipate them. As such, event-driven trading embraces merger arbitrage, distressed securities, ...
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