Kirchner - Merger arbitrage: how to profit from event-driven arbitrage
Here you can read online Kirchner - Merger arbitrage: how to profit from event-driven arbitrage full text of the book (entire story) in english for free. Download pdf and epub, get meaning, cover and reviews about this ebook. City: Hoboken;N.J, year: 2013;2010, publisher: Wiley, genre: Romance novel. Description of the work, (preface) as well as reviews are available. Best literature library LitArk.com created for fans of good reading and offers a wide selection of genres:
Romance novel
Science fiction
Adventure
Detective
Science
History
Home and family
Prose
Art
Politics
Computer
Non-fiction
Religion
Business
Children
Humor
Choose a favorite category and find really read worthwhile books. Enjoy immersion in the world of imagination, feel the emotions of the characters or learn something new for yourself, make an fascinating discovery.
- Book:Merger arbitrage: how to profit from event-driven arbitrage
- Author:
- Publisher:Wiley
- Genre:
- Year:2013;2010
- City:Hoboken;N.J
- Rating:4 / 5
- Favourites:Add to favourites
- Your mark:
Merger arbitrage: how to profit from event-driven arbitrage: summary, description and annotation
We offer to read an annotation, description, summary or preface (depends on what the author of the book "Merger arbitrage: how to profit from event-driven arbitrage" wrote himself). If you haven't found the necessary information about the book — write in the comments, we will try to find it.
Detailed look at an important hedge fund strategy Written by a fund manager who invests solely in merger arbitrage, also referred to as risk arbitrage, and other event-driven strategies, Merger Arbitrage is the definitive book on how this alternative hedge fund strategy works. Initial chapters are dedicated to the ins and outs of the strategycash mergers versus stock for stock mergers, legal aspects of mergers, and pitfalls of the merger processwhile later chapters focus on giving the reader sound advice for integrating merger arbitrage into an investment portfolio. Merger Arbitrage helps readers understand leverage and options, shorting stocks, and legal aspects of merger arbitrage, including seeking appraisal or filing lawsuits for inadequate merger consideration. For those looking to gain an edge in the merger arbitrage arena, this book has everything they need to succeed. Thomas F. Kirchner, CFA (New York, NY), is the founder and portfolio manager of Pennsylvania Avenue Funds (www.pennavefunds.com), which invests in merger arbitrage and other event-driven strategies.;Title Page; Copyright Page; Preface; Acknowledgements; PART One -- The Arbitrage Process; CHAPTER 1 -- Introduction to Merger Arbitrage; CASH MERGERS; STOCK-FOR-STOCK MERGERS; CHAPTER 2 -- Incorporating Risk into the Arbitrage Decision; PROBABILITY OF CLOSING; SEVERITY OF LOSSES; EXPECTED RETURN OF THE ARBITRAGE; CHAPTER 3 -- Sources of Risk and Return; DEAL SPREAD; TWO ASPECTS OF LIQUIDITY; TIMING AND SPEED OF CLOSING; DIVIDENDS; SHORT SALES AS A HEDGE AND AN ELEMENT OF RETURN; LEVERAGE BOOSTS RETURNS
Kirchner: author's other books
Who wrote Merger arbitrage: how to profit from event-driven arbitrage? Find out the surname, the name of the author of the book and a list of all author's works by series.
Rebecca Winters
David Stevenson
Mr. Chris Green
Andrew Pole
Arthur R. Thompson
Kate Welling
Merger arbitrage: how to profit from event-driven arbitrage — read online for free the complete book (whole text) full work
Below is the text of the book, divided by pages. System saving the place of the last page read, allows you to conveniently read the book "Merger arbitrage: how to profit from event-driven arbitrage" online for free, without having to search again every time where you left off. Put a bookmark, and you can go to the page where you finished reading at any time.
Light
Font size:
↓
↑
Reset
Interval:
↓
↑
Bookmark:
Make
Table of Contents
Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers professional and personal knowledge and understanding.
The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisers. Book topics range from portfolio management to e-commerce, risk management, financial engineering, valuation, and financial instrument analysis, as well as much more.
For a list of available titles, visit our web site at www.WileyFinance.com.
Preface
Merger arbitrage, also known as risk arbitrage, has grown exponentially over the last two decades from small operations within Wall Street firms to stand-alone arbitrage funds directly accessible to the public. Yet surprisingly little has been written on the topic. A number of academics have written studies about various aspects of the strategy. For the general public, I can count only five books on the topic. This small number pales in comparison to the information overload that other areas of finance experience. Since Guy Wyser-Prattes two monographs in the 1970s, only three other books about merger arbitrage have been published. One of them is Ivan Boeskys Merger Mania. Maybe potential writers fear that authoring a merger arbitrage book stands under a bad omen because Boesky was arrested a few weeks after the publication of his book. As the author of a merger arbitrage book, I certainly hope that writing a book and getting arrested are linked only by correlation and not by causality.
In this book I try to go beyond a mere description of the arbitrage process to incorporate some thoughts on the benefits of adding merger arbitrage to an investment portfolio and the vehicles investors can utilize to access the strategy. The expansion of the books horizon will make it more relevant to a broader investment audience. Nevertheless, the focus of the book remains on mergers and merger arbitrage, not asset allocation or portfolio management.
The book is organized into three parts: the first four chapters introduce the basics of the arbitrage process, Chapters 5 through 11 discuss what can go wrong, and Chapters 12 and 13 deal with some practical questions of investing in merger arbitrage.
Chapter 1 explains the basic types of mergers and how to set up the arbitrage. Chapter 2 expands the basic arbitrage by incorporating risk. Probabilities of failure and potential losses are incorporated into the return calculation to find an expected return of the arbitrage. Chapter 3 discusses different sources of risk and return in more detail, in particular the timing of mergers, leverage, and short sales.
The difference between mergers and tender offers is not well understood by many investment professionals. The terms are often used interchangeably. Chapter 4 goes into details and should be of interest to all investors, not just those seeking to read up on merger arbitrage.
Financing is often one of the most critical parts of an acquisition, and so Chapter 5 looks at different financing options.
Mergers are subject to a plethora of legal requirements, and I discuss them under different angles. Readers should keep in mind that this is a financial book, not a legal textbook. Many aspects are touched on only in a cursory manner. Boards of directors have to follow a number of procedures to ensure that a merger is fair to shareholders. This is discussed in Chapter 6.
Unfortunately, the law that is supposed to protect shareholders often is disregarded when managers buy the companies that they are managing as agents of their shareholders. Chapter 7 looks at management incentives for getting mergers done and how managers interests are often diametrically opposed to those of shareholders.
Similar conflicts of interest among managers, acquirers, and shareholders can be found in buyouts by private equity funds, discussed in Chapter 8. Now that the buyout wave of the monetarily lax Greenspan years has come to a halt, this is likely to be less of a concern for investors.
Minority squeeze-outs present risks of their own to merger arbitrageurs and therefore are discussed in a chapter of their own, Chapter 9.
The government gets involved in the merger process on several levels, both federal and state. Despite the obvious importance of government regulations, I have decided to relegate their discussion farther to the back of the book because I believe that the motivations of the market participantsmanagement, financiers, board membersare more relevant by far to the success of a merger than government regulations, discussed in Chapter 10. As they say: Where there is a will, there is a way.
Next, I step into a minefield by encouraging investors to seek to exercise their rights and get full value for their shares when a company is taken over. Chapter 11 describes methods that shareholders can use to that end. Too often have I seen investors resign when their company gets taken over for a lowball price. Most investors view themselves as stock pickers and throw in the towel too early. I hope that this chapter convinces investors, perhaps even some institutional investors, to fight for full value.
Chapter 12 explains the historical performance of merger arbitrage as an investment strategy and how it can be added to a diversified portfolio. This chapter in particular is relevant for investors who are looking to add merger arbitrage to their portfolio. Some background in modern portfolio theory is helpful for the understanding of this chapter, but readers without such knowledge should also be able to follow the thoughts and conclusions.
Finally, Chapter 13 gives some practical tips on investing in merger arbitrage. In particular, readers should recognize that cash holdings of event-driven investment strategies are dependent on events and not a deliberate asset allocation decision. As a result, merger arbitrageurs can have highly variable cash positions that are not an indication of their view of the market.
Chapter 13 contains some mathematical material. Stephen Hawking remarked in the introduction to his well-known A Brief History of Time that his publisher advised him each formula would reduce the potential readership by half. I trust that readers of financial books can handle a few formulas.
At the time of writing, the markets were in the midst of the worst financial crisis in a generation, the type of event that statisticians claim occurs only once in the lifetime of the universe. Financial markets could change dramatically once the crisis is over. It is difficult to forecast how much of the change will be mandated by the government or the financial industrys self-regulatory bodies and how much will be the result of Schumpeterian creative destruction. Writing any finance book in these times carries a severe risk of obsolescence of the text by the time it is printed. Even though I expect that the focus of the financial industrys changes will be in areas other than mergers, in particular in fixed income, without a doubt, collateral damage will affect arbitrageurs.
THOMAS KIRCHNER
Acknowledgments
I
Light
Font size:
↓
↑
Reset
Interval:
↓
↑
Bookmark:
Make
Similar books «Merger arbitrage: how to profit from event-driven arbitrage»
Look at similar books to Merger arbitrage: how to profit from event-driven arbitrage. We have selected literature similar in name and meaning in the hope of providing readers with more options to find new, interesting, not yet read works.
Rebecca Winters
David Stevenson
Mr. Chris Green
Andrew Pole
Arthur R. Thompson
Kate Welling
Reviews about «Merger arbitrage: how to profit from event-driven arbitrage»
Discussion, reviews of the book Merger arbitrage: how to profit from event-driven arbitrage and just readers' own opinions. Leave your comments, write what you think about the work, its meaning or the main characters. Specify what exactly you liked and what you didn't like, and why you think so.