Alternative strategies

Carmignac Portfolio Merger Arbitrage

SICAVGlobal marketArticle 8
Share Class


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
Recommended Minimum Investment Horizon
3 years
Cumulative Performance since launch
+ 3.2 %
+ 3.2 %
From 14/04/2023
To 18/04/2024
Calendar Year Performance 2023
+ 2.5 %
Net Asset Value
103.2 €
Asset Under Management
176 M €
Global market
SFDR - Fund Classification


Data as of:  18 Apr 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.

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:  29 Mar 2024.
Fund management team

Market environment

Whereas the first two months of the year passed without any clear trend for Merger Arbitrage investments, March saw a squeeze on a number of discounts, resulting in a positive overall performance for the strategy. There are several reasons for this. Numerous deals were completed in March, in a change from the previous months. The largest of these included the takeovers of Sovos Brands by Campbell Soup for $3bn, Splunk by Cisco for $28bn, and Karuna Therapeutics by Bristol-Myers Squibb for $11bn. Nearly 21 deals were finalised in March, up from 7 in February. Once these deals are closed and settled, the capital reinvested in ongoing deals squeezes certain discounts, as happened with Pioneer Natural Resources, Hess and Cerevel Therapeutics. Also, some companies were successful in the key stages of their regulatory clearance process. For example, Brookfield AM finally obtained approval from the UAE central bank for its acquisition of Network International. Olink’s takeover by Thermo Fischer Scientific received the green light from the Icelandic antitrust authority and Swedish ministry of foreign affairs. After months of uncertainty, Japan Investment Corp finally had its application rubberstamped by China’s antitrust regulator, allowing it to make an official bid for JSR. Also helping the Merger Arbitrage strategy were two bidding wars in the UK: the first for logistics services company Wincanton and the second for telecom equipment supplier Spirent Communications. The two companies’ share prices rose by 33% and 12% respectively. However, there was also some bad news: with the presidential election campaign in the background, the Biden administration formalised its opposition to the takeover of United States Steel by Nippon Steels. Shares in the former fell by 19% as a result. In terms of M&A activity, despite a 12% dip in volume relative to the previous month, March rounded off a very good Q1 2024. 92 deals were announced in the first three months of the year, up 48% on the equivalent period of 2023. In value terms, growth was also very solid: 41% y/y thanks to the return of mega-deals. Eight deals worth more than $10bn were announced in Q1 2024, compared with just four in Q4 2023.

Performance commentary

Our Merger Arbitrage strategy delivered a positive return over the month. The three main sources of performance were: 1) the squeeze on the JSR discount after the Chinese regulator gave its approval, allowing the buyer to formalise its offer; 2) the bidding war over Spirent Communications between two US equipment manufacturers, Viavi Solutions and Keysight Technologies, which pushed the target price up by 12%; and 3) the convergence of the discount on Karuna Therapeutics after the deal was finalised in the days that followed approval under the HSR Act. Negative influences on performance included a small position on United States Steel, for which the political angle is more significant than expected. As in February, volatility on Capri, which seems to be the focus of arbitrageurs’ fears about antitrust risk, weighed on performance.

Outlook strategy

The upturn in M&A over the fourth quarter of 2023, and confirmed early this year, allowed us to nudge the Fund’s investment rate up from 30% to 31%. Diversification remains satisfactory with 40 different M&A deals in the portfolio. We think that 2024 will see busier M&A activity after three years of decline. There are several encouraging signs: the prospect of monetary easing, which should bring back financial buyers; the return of mega deals in the second half of last year; the refocusing of M&A activity on sectors of the “old economy” due to the energy transition; and the resumption of deals in sectors like Technology, as in January when, structurally, external growth formed an integral part of business models. Announced in August 2023, new directives concerning takeover law in Japan should help kick-start activity in Asia. The risk premium on the Merger Arbitrage strategy still offers investors some attractive returns, especially at a time when few deals are collapsing.

Performance Overview

Data as of:  18 Apr 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 21/04/2024

Carmignac Portfolio Merger Arbitrage Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  28 Mar 2024.
North America7.8 %
Other countries7.6 %
Europe EUR2.8 %
Europe ex-EUR1.3 %
Total % of alternative19.5 %
North America7.8 %
4.1 %
3.8 %

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.
The information presented above is not contractually binding and does not constitute investment advice. Past performance is not a reliable indicator of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor), where applicable. Investors may lose some or all of their capital, as the capital in the UCI is not guaranteed. Access to the products and services presented herein may be restricted for some individuals or countries. Taxation depends on the situation of the individual. The risks, fees and recommended investment period for the UCI presented are detailed in the KIDs (key information documents) and prospectuses available on this website. The KID must be made available to the subscriber prior to purchase.). The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager.