Carmignac launches two Merger Arbitrage funds

Carmignac has launched and , two merger arbitrage funds with different risk-return profiles, available to professional and retail investors across various European countries.

Carmignac has been expanding its alternative capabilities for several years. The addition of a merger arbitrage team, through the appointment of fund managers Fabienne Cretin-Fumeron and Stéphane Dieudonné in February 2023, is in line with the growing demand from investors to diversify away from traditional asset classes into those offering a reduced volatility and uncorrelated sources of returns.

Fabienne Cretin-Fumeron and Stéphane Dieudonné add: “In this challenging environment of rising rates and market volatility, merger arbitrage is one of the few strategies which are positively correlated to rising rates, creating an attractive risk/return solution for our clients.”

Carmignac’s merger arbitrage funds seek to benefit from announced mergers and acquisitions, investing across developed markets. The aim is to generate a return by taking advantage of the spread between a target company’s share price and the offer price by selecting deals the team believes have the highest chance of succeeding (and thus achieving the offer price). As such, the team’s investment process centres on in-depth analysis of each merger agreement to identify all factors that could lead to the failure of a deal. While on average, 7% of M&A deals fail, the fund managers have been able to halve this risk thanks to their rigorous investment process. Fabienne and Stéphane benefit from a public consecutive 19-year track record managing a successful¹ merger arbitrage strategy together.

Maxime Carmignac, managing director of Carmignac UK and head of strategic product development at Carmignac, comments: “We are committed to offering investors looking for portfolio diversification access to the most appealing and differentiated asset classes. With these attractive and uncorrelated merger arbitrage funds, investors will benefit from Fabienne and Stéphane’s proven track record and risk management capabilities.”

has a defensive profile with an expected volatility of between 2% to 4% and is a more dynamic fund with an expected volatility of between 5% to 7%. Both funds are absolute return strategies and are classified as Article 8 under the Sustainable Finance Disclosure Regulation.

Both funds are available for subscription in Austria, Belgium, France, Germany, Italy, Ireland, Luxembourg, Portugal, Singapore, Spain, Sweden, the Netherlands and the United Kingdom.

¹Since the team’s setup in March 2004 until 31 October 2022, they have delivered a cumulative return of 36.7% versus 10.6% for the reference benchmark (Eonia until the end of December 2021. Ester for 2022). Source: Carmignac, Bloomberg.