Corporations have cash in the till; and it is sitting up, begging to be put to work. Thus, M&A deals are on the way.
Cerulli acknowledges that buying an existing boutique, as a way in which an established long-only mutual fund manager might start offering alternative products, is quicker than is the build-from-within approach. But the M-and-A shortcut ought to come with a warning.
Christopher Faille contemplates a newly listed blank check company looking to acquire a specialty chemicals concern, and he asks an expert what exactly "specialty" chemicals are. "And while I have you on the line...."
Companies in the chemicals industry end up in play as mergers-and-acquisitions targets when they have trouble getting financing any other way. If QE policy makes financing too easy, it has the counter-intuitive effect of freezing this particular M&A market.
The key to an equity hedge strategy in the U.S. at present is that “the basket of those stocks generating healthy profits becomes clearer to differentiate from those that are having trouble doing so” through the earnings season. PrevInvest is moderately bullish on this, but not bullish on an event-driven strategy.