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Season 3, Episode 16: Merger Arbitrage and Why to Not Fear The Antitrust Boogeyman

Last updated on July 14, 2021

With Deepak Gurnani, Versor Investments

Deepak Gurnani, managing partner of Versor Investments, joins the podcast to discuss merger arbitrage investing. 

Merger arb is the rare strategy that can (really!) consistently produce non-correlated returns. But it isn’t easy to execute. Gurnani provides some information around what has worked for his firm and things to look for for those wishing to get involved with the strategy.

Not intended as investment advice.

Content Highlights:

  • Versor Investments’ unique approach to merger arbitrage and why it’s different from most fundamental-based approaches (3:53);
  • Ultimately success in merger arb comes down to differentiating between mergers that will close successfully and those that will be terminated — and then overweighting the former (5:39);
  • Some of the alternative data sources that Versor uses to track and rate announced deals (7:49);
  • A merger’s time-to-completion and why it can be vital (13:51);
  • Digging in to the 10% failure rate for announced mergers and why it is likely inflated (15:41);
  • The antitrust environment under new FTC chair Lina Khan and other regulatory uncertainty (18:28);
  • Technology M&A: an opportunity? (21:44);
  • Background on the guest (25:12);
  • The state of M&A dealflow in the U.S. (28:50);
  • Improved offers and competing bids are on the rise, dramatically (33:23).

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