Event-Driven / Merger Arb to Fundamental L/S
Title basically says it, but how pigeon-holing is it to join a merger arb strat (or event driven generally) early in career? Seems like the other way around is much more flexible long-term
Merger arb to fundamental is extremely difficult.
Event driven to fundamental is ALOT easier. You can say you did more fundamental type of trades within the event driven world.
Careful though - not an amazing strategy. I was in event driven and got the fuck out with the above pitch.
im considering event driven…what type of plays did you make usually, and how do risk limits at pods apply for event driven? Also why leave? What percent of event driven is merger arb?
You do everything if you want - merger arb, spin offs, relistings, litigation.
I'm trying to do the same - can I ask you a few questions through DM?
Echoing this sentiment. It helps if you had prior IB experience covering an industry and are recruiting for a fundamental position in that sector. Otherwise, I found that teams preferred taking an analyst direct from IB/PE in their sector than taking a generalist arb.
Not a lot of guys do this because arbs don’t really have any skills that translate to broader HF space.
Mainly modeling. My first PM couldn’t do anything is excel. Like anything at all. Not that he DIDNT, he COULDNT.
Modeling offers no value to an arb - we don’t care what numbers look like in 2 quarters because the deal will be done by then. (Obviously, not always true… CPRI downside came down a lot, but it’s pretty much just insanely simple merger models and downside calculations off of a multiple) Explaining this to L/S friends is always entertaining.
Event guys definitely have an easier time making the switch, because it’s more focused on valuation/other fundamental aspects of investing… thematic elements, etc.
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