Learning about Event Driven
I am really interested in learning about how to think like an event driven/merger arb investor.
I have read some relevant books, including you can be a stock market genius by joel greenblatt, but after talking to a merger arb PM they said that reading was not really an effective way to learn how to think like this type of investor.
I understand that there isn't necessarily some 'secret sauce' to learning this, but if anyone could shed some light onto how to understand what to look out for, materials to read, or presentations from relevant funds, then that would be much appreciated.
Bump
Hello,
I have written at length about this on some other posts. I think you might be able to click on my account and see my past “comments” there is more detail there.
Summarized - it’s an apprenticeship. Much more so than other strategies. There aren’t that many seats. There aren’t even very many juniors, because, from my experience and process, there isn’t a ton of advanced modeling.
You all are at a huge advantage with LEARNING from AI. You have all risk arb history at your fingertips. Go figure out what happened in WBD, CPRI, X, HZNP have AI pull articles about big merger arb trades and then go read about them like you’re reading a very detailed history book.
And right now, live deals - BHF, UNF/CTAS. NSC/UNP.
UNF/CTAS is probably easiest. Why is FTC looking at the deal? Regional markets is the answer. Or is it national accounts like in Sysco US Foods? Can mom and pop shops compete? Is VSTS a viable competitor? Can VSTS buy divestitures if they are required? Is someone other than VSTS buying a chunk? Alsco? How much is CTAS willing to divest?
Deep dive on it. Build a map of all locations. Figure out who uses who for rentals in each radius from a plant
lt will take you a very long time to figure that out.
not a growth area. good books from a different market era - useful context but returns are also quite differnent vs today for various reasons. analyze HF jobs as you would any other biz >> look for higher-growth opportunity sets
Where do you see highest growth? Macro? Quant? Pods? Activism? Fundamental? Credit? Distress?
Pods, quant, some privates still net growing. Not distress or activism or even SM fundamental — net losers of late. There’s always exceptions to the rule so take with a pinch of salt. Industry writ large is far more mature. Maybe SRT or credit secondaries. To state the obvious, AI ecosystem prob will provide the biggest opportunity set of next decade(s)
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