Kite Lake, which returned 13 percent last year, oversees about $625 million, up from $355 million in December, according to a company official. And the Everett Opportunities Fund said it’s getting closer to achieving the $550 million level at which it plans to shut to new money. The hedge fund made 10 percent for investors last year.
Consultants Cambridge Associates and fund-of-funds 50 South Capital are among other investors seeking to invest in event-driven hedge funds.
Recovering Slowly
Globally, outflows from event-driven funds are slowing, with investors pulling less than $4 billion in the first four months of 2017, compared with about $60 billion over 2015 and 2016, eVestment data show. Investors poured a net $12 billion into hedge funds overall this year, after pulling almost $112 billion in 2016.
Those flows underpin the industry’s gradual recovery from middling performance as the prospect of further rate increases from the Federal Reserve creates more opportunities to make money. Assets managed by hedge funds globally hit a record $3.1 trillion at the end of March. The number of hedge-fund launches rose for the first time in 12 months during the first quarter, and liquidations fell, according to HFR.
The picture for event-driven funds outside of Europe is less rosy, with optimism waning that President Donald Trump will implement reforms that will spur takeovers. European companies, though, have a lot of catching-up to do after their U.S. counterparts went through a wave of transactions, said Michel Massoud, founder of London-based Melqart.
Deals worth $1.5 trillion have been announced globally this year, about 4 percent less than in the same period of 2016. In the U.S., volumes are down nearly 11 percent to $751 billion, though that’s after two strong years when companies spent trillions of dollars on acquisitions, spinoffs and joint ventures.
“Europe has a lot of catch-up to do,” said Massoud. “Corporates are doing better, earnings are growing, with analysts’ revisions trending up.”