Dealmaking Frenzy Leads to Heady Days for Event-Driven Funds

The surge in deal-making has created the ideal environment for merger arbitrage or event-driven funds, said K.C. Nelson, portfolio manager for the Driehaus Event Driven Fund. Nelson added that the Driehaus fund uses stocks, bonds and equity and credit derivatives to establish a position on a deal. He said his fund profited from the risk arbitrage spread in the attempted merger between Comcast and Time Warner Cable and believes there is better than a 50/50 chance that Time Warner Cable will be acquired by Charter Communications. Meanwhile, Nelson said he is long Teva through call options as it pursues Mylan.