Expert view: Choosing a fund

This article is part of
Event-Driven Investing - September 2013

“While the first step to investing in event-driven strategies is to understand the strategies themselves, the way in which the strategy is accessed is also important.

“A wide range of hedge funds implement event-driven strategies: from broad multi-strategy funds which look to time entry and exit to each strategy; to credit specialists who will implement distressed debt strategies at the appropriate stage in the business cycle; to dedicated single or multi-strategy event funds.

“In addition to selecting the type of fund to access these opportunities, size can also be important – on the one hand these strategies generally require significant levels of fundamental analysis, and as such can be resource intensive.

Article continues after advert

“On the other hand, particularly in equity situations, capacity can be constrained, as such picking a manager which is large enough to employ a sufficiently resourced and skilled team, while remaining nimble enough to reallocate capital and be selective in its stock selection is critical.”

Damien Loveday is global head of hedge fund manager research at Towers Watson