Alternative strategies

Carmignac Portfolio Merger Arbitrage

SICAVGlobal marketArticle 8
Share Class

LU2585800795

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
+ 3.7 %
-
-
-
+ 3.8 %
From 14/04/2023
To 13/06/2024
Calendar Year Performance 2023
-
-
-
-
-
-
-
-
-
+ 2.5 %
Net Asset Value
103.7 €
Asset Under Management
193 M €
Market
Global market
SFDR - Fund Classification

Article

8
Data as of:  13 Jun 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:  31 May 2024.
Fund management team

Market environment

  • May was a difficult month for the strategy, with the HFRX Merger Arbitrage index down 0.8%.

  • This was partly due to the increase in the DS Smith spread amid rumours of an offer for its potential buyer, International Paper, from Brazil’s Suzano.

  • Other spreads also rose in May, though without anything specific to point out: Hess, Ansys and Cerevel Therapeutics

  • A few major deals were completed: Pioneer Natural Resources, SP Plus and MorphoSys

  • It seems the resources freed up are being reallocated to some recently announced smaller deals, on which spreads are fairly small.

  • M&A activity is holding up well with 30 new deals announced in May for a total of $114bn. Most of this growth is coming from Europe and Asia.

  • Private Equity funds account for nearly half of all bidders in deals announced during the month.

Performance commentary

  • The Fund delivered a positive return.

  • The main contributors were: Pioneer Natural Resources, SP Plus and MorphoSys

  • The main hindrances were: Hess, Ansys and Cerevel Therapeutics

  • We had no position on the DS Smith spread when rumours emerged about an offer for its potential buyer. Shortly after, though, we opened a small position when the risk-reward profile looked interesting.

Outlook strategy

  • The Fund’s investment rate is currently close to 26% given the large number of deals closed in May.

  • With 42 positions in the portfolio, diversification remains satisfactory.

  • 2024 should see the M&A cycle pick up due to the stabilisation (or even reduction) in interest rates, the energy transition spreading to more sectors of the economy, private equity funds making a return, and Japanese stock markets undergoing regulatory change.

  • 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:  13 Jun 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 15/06/2024

Carmignac Portfolio Merger Arbitrage Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  31 May 2024.
North America8.1 %
Other countries4.4 %
Europe ex-EUR3.0 %
Europe EUR2.1 %
Total % of alternative17.5 %
North America8.1 %
usUSA
5.8 %
caCanada
2.3 %

Key figures

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

Exposure Data

Data as of:  31 May 2024.
Net Equity Exposure17.5 %
Beta0.0 %
Sortino Ratio+11.1
Number of Holdings37

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.