Survey: UCITS Investors Keen On Merger Arbitrage Strategies

Jul 18 2011 | 1:13pm ET

Merger arbitrage is the most popular strategy among alternative UCITS investors, according to the latest survey by the Malta-based financial services group ML Capital.

As it does each quarter, the company polled a range of investors who together manage €50 billion and invest about €10 billion in alternative UCITS products. It found 79% planned to increase or maintain their exposure to this asset class in the coming quarter.

ML Capital’s survey revealed that 49% of respondents expected to allocate more to merger arbitrage strategies, while one third were looking to increase their allocations to market neutral strategies.

Demand for most equity hedge strategies is expected to drop—European and global most dratstically.

U.S. long/short funds fare best of all equities strategies, with almost 40% of respondents planning to raise their investments.

Japan is still struggling, with only 7% of respondents planning to increase their allocations to the country, the lowest level of any strategy in this quarter's survey.

Commenting on the latest survey, ML Capital co-founder and chair John Lowry said the increasing interest in “technical” strategies like merger arbitrage and market neutral “may be a sign that the Alternative UCITS space is now beginning to mature.”

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