Alternative strategies

Carmignac Portfolio Merger Arbitrage Plus

SICAVGlobal marketArticle 8
Share Class


An active absolute return strategy focusing on merger arbitrage opportunities
  • An active merger arbitrage strategy that aims to provide positive absolute 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
+ 3.3 %
+ 4.6 %
From 14/04/2023
To 17/05/2024
Calendar Year Performance 2023
+ 2.8 %
Net Asset Value
103.3 €
Asset Under Management
142 M €
Global market
SFDR - Fund Classification


Data as of:  17 May 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 Plus 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:  30 Apr 2024.
Fund management team

Market environment

April was a tricky month not just for our Fund but for the strategy in general as the HFRX Merger Arbitrage index lost 1.73%. This was largely due to investors de-risking their portfolios after two big events. The first was the Biden administration’s announcement, in March, of its opposition to the takeover of United States Steel by Nippon Steel. This surprised many M&A traders, who took a more positive view of this deal with a strategic partner to the United States. The second was the FTC’s decision to instigate legal proceedings in order to block Capri’s takeover by Tapestry, believing that the two companies would have a dominant share of the affordable luxury handbag market. Most investors were again caught off-guard, judging this overly restrictive definition of the segment in which Capri and Tapestry operate to be unrepresentative of a highly competitive industry having low barriers to entry. The losses caused by these two events prompted many funds to reduce their overall M&A exposure, leading to a general increase in discounts, especially where there was a degree of antitrust risk, as was the case with Juniper, Ansys, Axonics and Southwestern Energy. As few major deals were finalised in April, the discount convergence that would usually occur upon completion provided no real boost to performance. The good news during the month was the bidding war between two private equity groups for Spain’s Applus Services, which raised the offer price by around 16%. In terms of M&A activity, the cycle continues to pick up with 38 new deals announced during the month for a total of USD 121 bn, equating to annual growth of 27%. The biggest deals included Australia’s BHP drafting a bid of USD 33 bn for Anglo American in mining, and Johnson & Johnson acquiring Shockwave Medical for USD 11 bn in healthcare. As in previous months, this pick-up is particularly significant in Europe and, more specifically, the United Kingdom. The combination of cheap equities and a weakened currency makes the UK market attractive to foreign buyers acting on both strategic and financial impulses.

Performance commentary

Our Merger Arbitrage strategy posted a negative performance over the month. The two main sources of performance were: 1) the higher bid for Applus Service, 2) the squeeze on two significant discounts in the oil industry: Hess and Pioneer Natural Resources. The main drag on performance was our exposure to the Capri-Tapestry deal. After the FTC complained, the deal went before the courts. The two parties will have to argue their case before a judge, who should deliver a ruling in September. It’s hard to say what the outcome will be at this point, so we opted to close our position but will be following proceedings closely.

Outlook strategy

The upturn in M&A over the fourth quarter of 2023, and confirmed early this year, allowed us to raise the Fund’s investment rate to 98%. Diversification remains satisfactory with 42 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:  17 May 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 22/05/2024

Carmignac Portfolio Merger Arbitrage Plus Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  30 Apr 2024.
North America29.7 %
Other countries16.6 %
Europe EUR11.8 %
Europe ex-EUR5.4 %
Total % of alternative63.5 %
North America29.7 %
22.9 %
6.8 %

Key figures

Below are the key figures for the Fund, which will give you a clearer idea of the Fund's management and equity positioning.

Exposure Data

Data as of:  30 Apr 2024.
Equity Investment Weight58.3 %
Net Equity Exposure63.5 %
Number of Equity Issuers39
Active Share50.0 %

The strategy in a nutshell

Discover the Fund’s main features and benefits through the words of the Fund Managers.
Fund Management Team
The advantage of Merger Arbitrage strategy is that it carries virtually no market risk. The only associated risk is that of a deal failure. That is why our approach is very cautious on two levels: we’re very selective in choosing the deals and we aim to maintain a highly diversified portfolio.
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.