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6.14.2018

Event-Driven Update

On the evening of June 12, 2018, Judge Richard Leon determined that AT&T can proceed with its planned acquisition of Time Warner with no conditions. The decision supports decades of precedent antitrust law, and we expect the pending mergers between Aetna/CVS and Express Scripts/Cigna will be impacted positively.

We also see a high probability of a major bid to the media and telecom space. On June 13, Comcast bid $65 billion for 21st Century Fox. If a bidding war erupts between Comcast and Disney, with whom Fox has already agreed to a $52.4 billion deal, press reports suggest Comcast could go as high as $80 billion without putting its credit rating in jeopardy.

In another high-profile deal, NXP Semiconductor (NXPI) last week traded higher when a deal to remove US sanctions on ZTE appeared imminent. It seemed that a group within the Trump administration was pushing a quid pro quo deal to gain antitrust approval for the Qualcomm/NXPI merger from China, in exchange for relaxing the sanctions on ZTE. This week, however, NXPI traded lower, after it was reported that an amendment to the National Defense Authorization Act would include actions “to curtail the president’s ability to mitigate sanctions against ZTE.” While a more benign version is more likely to be passed, the news led to continued volatility in NXPI’s stock.

Corporate spin-offs also continue to be a focus for event-driven equity investors. These transactions often create valuation dislocations between the pre- and post-spin off entities. Recently, several companies have concluded the spin-off process including the following:

  • DXC Technology, a provider of information technology services, spun off its government services business into Perspecta Inc. (PRSP), leaving the remaining company with a clean balance sheet and focused on commercial IT services.
  • Spirit Realty Corp (SRC), a real estate investment trust, spun off its distressed assets into Spirit MTA leaving the remaining company with a clean portfolio of triple net lease retail assets.
  • Wyndham Worldwide (WYN) spun off its hotel management business into Wyndham Hotels (WH), leaving the remaining company focused on the timeshare business (WYND).
  • La Quinta (LQ) sold its hotel management business to WYN and then spun-off its hotel real estate into a REIT called Corepoint Lodging (CPLG).

Such corporate transactions offer idiosyncratic ways to invest both long and short, with opportunities during both the pre-spin stage and the post-spin stage.

This week two rumored names, Envision Healthcare (EVHC) and USG Corp (USG), ended up being acquired. EVHC agreed to be acquired by KKR for $46 per share in cash, while USG entered into a definitive acquisition agreement for $44 per share.

Rent-A-Center (RCII), which announced last fall its plans to conduct a strategic review following a $13 per share cash approach by Vintage Capital during the summer, concluded its strategic review. Management decided not to sell the company, but Vintage submitted a best and final offer to acquire RCII at $14 per share immediately following RCII’s announcement.

Macro Update

Many moving pieces around the world are keeping investors cautious going into the summer.

This week, the Federal Open Market Committee (FOMC) met on Wednesday where the market is increasingly focused on whether the committee will drop language it has used since late 2015 that says rates would remain below historical levels “for some time” to come.

According to Reuters, that small change would mark a broad acknowledgement that, nine years into the second-longest US economic expansion on record, monetary policy and the economy in general are starting to look increasingly normal, both domestically and abroad.

Adding to the theme of interest rate policy normalization, the European Central Bank (ECB) meets on June 14 to debate ending its massive bond purchase scheme later this year, taking its biggest step in dismantling crisis-era stimulus. The end of the purchases is a foregone conclusion, and the key question is how the ECB will guide markets on the interest-rate outlook.

Recent volatility in Europe, created by Italian political dynamics, subsided this week after the new Italian Minister of Finance over the weekend rejected the idea of Italy leaving the European Union. His comments were well-received by markets and led to a rebound in European indices.

A spin-off is the creation of an independent company through the sale or distribution of new shares of an existing unit of a parent company. A triple net lease is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance on the property in addition to any normal fees that are expected under the agreement.

Please click here to view the most recent top ten holdings for each of our funds.

4.30.2018
Manager Commentary – April 30, 2018

While US/China trade relations have dictated spreads (and volatility) over the past month (as we previously discussed in our last update), we have just encountered one of the busiest weeks for merger announcements in some time. While each of these transactions will trade on its own timeline and merits, the list is encouraging as it reflects definitive efforts by corporate boards and management teams across various industries to take actions to further growth and invest in future performance. It also supports our optimistic view of a robust deal environment for 2018 and gives event-driven investors a broader pool of transactions in which to invest.

Telecommunication Services
Sprint (S)/T-Mobile US (TMUS): On April 29, 2018, Sprint – a US provider of wireless and landline telecommunications services – agreed to be acquired by T-Mobile – a US provider of wireless communications – for $59 billion (including debt). Under current terms, Sprint shareholders will receive 0.10256 TMUS shares for an implied per share value of $6.62 and a total equity value of approximately $26.5 billion based on TMUS’ previous closing price. The offer represents a premium of approximately 29% to Sprint’s closing price from April 9 (before reports that the companies re-engaged in discussions regarding a deal). It appears that the deal came together again after Sprint’s largest holder, SoftBank, and its leader Masayoshi Son, agreed to cede majority control to TMUS.

Energy
Andeavor (ANDV)/Marathon Petroleum (MPC): On April 30, 2018, ANDV – a US downstream energy company – agreed to be acquired by MPC – another US downstream energy company – for $30.4 billion (including debt), or $152.27 per share in cash and stock. ANDV shareholders may elect to receive 1.87 MPC shares or $152.27 in cash, subject to proration. The consideration represents a total equity value of approximately $23.3 billion based on MPC’s previous closing price. The offer represents a premium of approximately 24% to ANDV’s previous closing price.

Real Estate
DCT Industrial Trust (DCT)/Prologic (PLD): On April 29, 2018, in a transaction centered in the global storage and logistics business, DCT – a US real estate investment trust – agreed to be acquired by PLD – another real estate investment trust – for $8.2 billion (including debt), or $67.91 per share in stock. DCT shareholders will receive 1.02 Prologic shares for an implied per share value of $67.91 and total equity value of approximately $6.5 billion based on PLD’s previous closing price. The offer represents a premium of approximately 16% to DCT’s previous closing price.

Consumer Discretionary
ILG (ILG)/Marriott Vacations Worldwide (VAC): On April 30, 2018, after year-long negotiations and approaches, ILG – a US provider of membership and leisure services to the vacation industry – agreed to be acquired by VAC – a US developer and manager of vacation ownership and related products – for $5.6 billion (including debt), or $36.93 per share in cash and stock. ILG shareholders will receive $14.75 in cash and 0.165 VAC shares for a total equity value of approximately $4.6 billion based on VAC’s previous closing price.

Health Care
SteadyMed (STDY)/United Therapeutics (UTHR): On April 30, 2018, UTHR – a US developer of pharmaceuticals to treat vascular diseases – agreed to buy STDY – a US pharmaceutical company focused on the development and commercialization of therapeutic products – for $4.46 per share in cash plus an additional $2.63 per share in cash upon achievement of a milestone related to the commercialization of Trevyent, a leading drug candidate for the treatment of pulmonary arterial hypertension. The upfront consideration represents a premium of approximately 68% to STDY’s previous closing price and the total consideration, including the milestone payment – approximately $200 million – represents a premium of approximately 168% to SteadyMed’s previous closing price.

Consumer Staples
Asda Group/J Sainsbury: This year has brought with it a significant uptick in deal volumes in Europe as well, On April 30, 2018, J Sainsbury, the UK’s second largest food retailer, struck a deal to take over Walmart subsidiary ASDA, which is the UK’s third largest grocer. If approved, Walmart would hold 42% of the new business. The transaction is being viewed as a response to the threat from Amazon and rival Tesco’s tie-up with wholesaler Booker.

Other Market Color:

As the Federal Reserve continues to increase short-term rates and economic activity moves higher, the front-end of the yield curve has flattened relative to the longer end of the curve. With the US six-month Treasury Bill at 1.96%, the one-year Treasury Bill at 2.17%, and the two-year Treasury Note at 2.48%, short-term rates are providing some interesting alternatives for investors. Given our focus on short-duration catalysts and events, we anticipate that overall deal spreads will increase to reflect these higher risk-free rates, which could present a more attractive set of returns especially when compared to the zero-rate environment that investors have experienced since the financial crisis. Last week, Rick Rieder, the CIO of global fixed income at BlackRock, noted during a CNBC interview that, “The story is…the front end of the yield curve. It is now an alternative to buying equities, to buying risk assets, to buying high yield, and people aren’t focused on it. It is a big deal.” We agree, and believe our strategies are well-positioned across the equity and credit markets to benefit from this trend.

Glossary: A deal spread is the difference between the price at which a target company’s shares currently trade, and the price an acquiring company has agreed to pay. The yield curve is a curve showing several yields or interest rates across different contract lengths for a similar debt contract. The curve shows the relation between the (level of the) interest rate (or cost of borrowing) and the time to maturity, known as the “term,” of the debt for a given borrower in a given currency. A six-month Treasury Bill is a six-month-dated government security, yielding no interest but issued at a discount on its redemption price. A one-year Treasury Bill is a one-year-dated government security, yielding no interest but issued at a discount on its redemption price. A two-year Treasury Note is a marketable U.S. government debt security with a fixed interest rate and a two-year maturity.

Investing involves risk, including potential loss of principal. The securities mentioned were selected for discussion purposes only and may not represent current holdings of the Arbitrage Funds.

4.20.2018

Tensions between the US and China have risen in recent months, with the fallout impacting regulatory approval processes in some mergers and acquisitions. For more information on the historical context and what it means for our strategy, please read this note from the desk.

4.2.2018

Following a year of historically low volatility, the market exhibited demonstrably higher uncertainty in the first quarter of 2018. The CBOE Volatility Index (“VIX”), a popular measure of domestic equity market volatility, rose from 10 at year-end to a peak of 37 in early February. Since February, VIX levels have continued to fluctuate between 15 and 25. This volatility reflects the recalibration of market valuations with respect to the removal of the Federal Reserve’s quantitative easing policies, higher short-term interest rates, steady economic growth, and higher potential inflation.

Increases in Treasury yields have not led to significant increases in credit spreads, which continue to be near the tights seen in mid-2014. Most bond price pressure has instead been driven by interest rates. Lower medium grade bonds and non-investment grade speculative bonds have seen the biggest increase in credit spreads during this most recent move up in Treasury yields, reflective of lower appetite for bonds with more rate sensitivity.

The event-driven landscape was not immune to the effects of the quarter’s volatility spikes. While continued economic growth and recent changes to the US tax code have led to more investment opportunities in mergers and acquisitions, assets sales, and spin-offs, there are currently five deals that are primarily responsible for driving returns and volatility in the merger arbitrage space:

  • Qualcomm for NXP Semiconductors (QCOM/NXPI)
  • Microchip Technology for Microsemi (MCHP/MSCC)
  • United Technologies for Rockwell Collins (UTX/COL)
  • AT&T for Time Warner (ATT/TWX)
  • Bayer AG for Monsanto (BAYN GR/MON)

The major factor impacting QCOM/NXPI, MCHP/MSCC, and UTX/COL is the trade dispute between the US and China. Headlines, tariffs, and possible trade negotiations between the two countries have led to stricter scrutiny and delays in the CFIUS (Committee on Foreign Investment in the United States) and MOFCOM (Ministry of Commerce of the People’s Republic of China) approval processes required for these deals to conclude. The outcomes of ATT/TWX and BAYN GR/MON, on the other hand, are being governed by US antitrust approval processes.

We continue to believe that the resolution of these deals will influence spreads, performance, and volatility in the near-to-medium term, and we look forward to providing our insights as these events evolve.

The CBOE Volatility Index (“VIX”) is an index that is commonly used as a measure of domestic equity market volatility. A credit spread is the difference in yield between a US Treasury bond and a debt security that are identical in all respects except credit quality. A Treasury yield is the return on investment of a US government debt obligation. Quantitative easing is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to stimulate the economy and increase liquidity.

Please click here to view the most recent top ten holdings for each of our funds.

3.26.2018
Announcement to Investors

We are pleased to announce that we have named Chief Investment Officer John Orrico to both our Arbitrage Credit Opportunities Fund and our Arbitrage Event-Driven Fund as a Co-Portfolio Manager. Robert Ryon, who had been a Co-Portfolio Manager since June 2016, will be departing the firm effective March 31, 2018 to pursue other opportunities.

Water Island Capital has a team-based approach to managing all our investment strategies. With the addition of John Orrico as a named Co-Portfolio Manager, the Arbitrage Credit Opportunities Fund will be led by Gregg Loprete and John Orrico. The Arbitrage Event-Driven Fund will be led by Ted Chen, Roger Foltynowicz, Todd Munn, Gregg Loprete, and John Orrico. The investment objectives, investment strategy, and all other attributes of our funds remain unchanged.

We continue to see opportunities in today’s markets and are fortunate to have an excellent team of investment professionals who are dedicated to meeting the high expectations of our investors.

2.28.2018

Interest rates have been a focal point of conversations this past week. Regarding the impact to the overall equity and credit markets, here are our thoughts:

  • The market is undergoing a crucial period where Central Banks are removing quantitative easing from the system, while deficit spending is expected to increase longer-dated treasury issuance. Although economic growth indicators continue to show positive momentum, interest rates are recalibrating higher with expectations that growth will lead to higher inflation.
  • The US 10-Year Treasury yield increased from 2.41% at year-end to 2.90% last week. The move was a significant contributor to the market volatility seen over the prior month.
  • Further contributing to the rates discussion, minutes of the Federal Open Market Committee’s January meeting were released last week. The notes indicated a more positive view on the growth outlook citing recent tax legislation, the global economic outlook, and easier financial conditions as supportive of growth “over coming quarters.” Despite this upbeat assessment, committee members did not yet see strong signs of wage pressure.
  • During the market’s recent volatility, credit markets appeared more driven by rate fears rather than credit concerns, but credit trading has been orderly. We think that future volatility in fixed income markets will come more from the velocity of rates changes rather than actual higher levels.
  • Primary issuance activity remains on track and we would expect to see continued demand for levered loans as the product provides floating rates and a hedge against rising rates. (Loans are also a key component to deal financing.)

Beyond the broader markets, the rate conversation is also affecting the event-driven space. Our recent observations:

  • Event-driven strategies have held up relatively well during the recent market volatility and provided a buffer to investor equity and fixed income portfolios.
  • We continue to see investor interest in strategies that are less impacted by rising interest rates and high volatility.
  • During the most volatile market period, merger arbitrage spreads widened, primarily in transactions with longer-dated timelines.
  • In equity special situations, event premiums remained relatively stable. Long re-ratings that were paired with market hedges traded flat to slightly better as the alpha long positions outperformed the market. (Conversely, short re-rating positions did the opposite as long market hedges underperformed alpha shorts.)
  • Wider spreads and lower prices provided the investment team with favorable opportunities to add to specific equity and credit positions.
  • Several recent deal announcements highlight continued activity in the mergers and acquisitions space (e.g., Qualcomm raised its offer for NXPI from $110 to $127.50 per shares; Rite Aid entered into a merger agreement with privately-held Albertsons for the remainder of its stores that are not being sold to Walgreens; and Comcast proposed an all-cash offer to acquire Sky, placing it in direct bidding competition with a pending offer from 21st Century Fox).

Spreads, or deal spreads, refers to the difference between the price at which a target company’s shares currently trade, and the price an acquiring company has agreed to pay. An alpha security, or alpha position, refers to the primary security of an investment idea (i.e., excluding hedges). A re-rating occurs when the market changes its view of a company sufficiently to make valuation ratios (such as price-earnings ratio) substantially higher or lower. The US 10-Year Treasury yield is the return on investment on US government debt obligations with a maturity of ten years, the amount and direction of which is a commonly-used economic indicator.

Please click here to view the most recent top ten holdings for each of our funds.

2.13.2018

Volatility and the Illusion of Diversification

As we observe recent market events, what is extraordinary to us is not the sharp rise in volatility over the past couple weeks, but rather the extended periods of subdued volatility over the previous eight years. We don’t know if this marks the beginning of a “new normal.” We don’t pretend to know the future direction of the equity markets, or whether bond yields have begun an inexorable path upwards, or even whether volatility will remain at elevated levels. However, what the past fortnight has reminded us of is that volatility is a mean reverting asset, and reversion to the mean can have unexpected consequences.

It is not just investors who shorted the fear gauge through inverse VIX exchange traded funds or through option volatility mutual funds who had a brutal awakening. Many investors were likely surprised (and disappointed) to observe correlations converge across the breadth of their investments. This phenomenon where different asset classes – stocks, bonds, real estate and alternative investments – all lose value to some degree at the same time is commonly referred to as “short volatility.” In fact, our research indicates the majority of asset classes lose value when volatility rises. This raises the inevitable question: what type of portfolio will be able to withstand the impact of spikes in volatility and preserve capital?

At Water Island Capital, we have analyzed the historical data across various investment strategies with the goal of identifying those asset classes that have demonstrated resilience in withstanding large drawdowns from the re-pricing of risk. Our work indicates that while many alternative investments will likely fail to protect when markets become more volatile, there is a subset of strategies, including Merger Arbitrage, Market Neutral and Managed Futures, that can potentially protect against capital loss and deliver sustainable diversification benefits, regardless of the volatility environment.

In today’s environment, we believe our research paper on this phenomenon (“Short Volatility and the Illusion of Diversification”) is particularly relevant. If you would like to learn more, please click here to access the paper.

The "VIX," also known as the CBOE Market Volatility Index, is an index that is commonly used as a measure of domestic equity market volatility.

Past performance is not indicative of future results.

2.7.2018

Over the past few trading days we have witnessed a spike in volatility that caught many market watchers off guard, with the CBOE Market Volatility Index, aka the “VIX,” having closed above 20 for the first time since November 2016. The market sell-off was largely a reaction to fears of rising inflation and the potential for interest rates to rise more quickly than expected, and it has caused some investors to review their portfolios and reset their near-term expectations for global equity markets.

We at Water Island Capital are always cognizant of the volatility environment. Volatility can be one of the drivers of returns for event-driven investment strategies, and we believe that for a prudent and prepared investor, bouts of volatility can serve more as opportunity than as misfortune. With that said, how has this recent shake-up in the market impacted our strategies, and how are we reacting?

  • Large scale market movements have resulted in derisking by market participants across the board. This has led to wider spreads in certain transactions and better profit opportunities across event-driven strategies, most specifically merger arbitrage.
  • Entering 2018 our expectations for renewed volatility and a market pullback drove our decision to maintain above-average cash levels. This “dry powder” has allowed us to take advantage of opportunities across the event landscape. We’ve added capital to our highest conviction ideas at attractive entry points, effectively enhancing the portfolios’ potential return profile.
  • In our merger arbitrage strategy, there have been some mark-to-market impacts to specific deals as spreads have widened, but we believe that these will be among the first to recover given the definitive contracts that are in place.
  • Importantly, our sizing and positioning procedures during volatile periods follow the exact same processes utilized during normalized market conditions: we continue to focus on high conviction, strategic, definitive situations.
  • In managing our portfolios, we attempt to reduce or eliminate short-volatility exposure, with the goal of generating a market neutral stance that can endure the types of conditions that we’ve witnessed over the past few days.

In our communications with clients, we have consistently emphasized how interest rates and volatility can drive returns for spread-based strategies such as merger arbitrage. Given the recent trends in these areas, we believe the marketplace is moving in a direction that can prove beneficial for our event-driven strategies and, ultimately, our clients.

Spreads, or deal spreads, refers to the difference between the price at which a target company’s shares currently trade, and the price an acquiring company has agreed to pay. Mark-to-market refers to the valuation of investments based on current market values. To derisk means to take steps to make something less risky or less likely to involve a financial loss, and frequently involves exiting or reducing positions. The CBOE Market Volatility Index, or VIX, is an index that is commonly used as a measure of domestic equity market volatility.

1.31.2018

The recent passage of the new U.S. tax code has confirmed our optimism for event-driven opportunities in 2018. Corporate management and boards have greater clarity around taxes, and we believe the decrease in the corporate tax rate from 35% to 21%, coupled with a one-time tax on the repatriation of foreign cash to the US, will lead to increased corporate activity.

A trend is beginning to emerge in the biotech space as recent transactions were announced with very large premiums. Celgene paid a 91% premium for its acquisition of Juno Therapeutics while Sanofi paid a 64% premium for its acquisition of Bioverativ. Despite sound, stable buyers, these deal premiums have led to high initial deal spreads as pre-announcement holders are less sensitive to selling and booking a profit (given the massive run-ups in these stocks).

We have also seen robust activity of “strategic alternatives” for companies such as Xerox, Microsemi Corp., and Akamai. These situations may develop into compelling special situation opportunities including speculative mergers and acquisitions, spin-offs, assets sales, and debt repurchases.

Please click here to view the most recent top ten holdings for each of our funds.

1.30.2018
Introducing more frequent market commentary from Water Island Capital

Since 2000, the Arbitrage Funds – advised by Water Island Capital – have been a pioneer in offering event-driven investment strategies in a mutual fund format. Coupled with our longstanding track record, our singular focus on catalyst-driven investing places us in a prominent position to share our observations on this segment of our industry. As such, we are pleased to announce that we will be publishing more frequent market commentary to the Updates section of our website. In publishing our thoughts in a more frequent manner, our goal is to provide timely updates on issues impacting the event-driven sector and to provide our audience with information that may help them navigate the current market. If you would like to receive this commentary directly in your inbox, we encourage you to subscribe to our mailing list.

12.15.2017
Arbitrage Funds 2017 Year-End Distributions

The Arbitrage Funds will be making the following year-end distribution payments for 2017 with a record date of 12/13/17, an ex-dividend/reinvest date of 12/14/17, and a payable date of 12/15/17:

THE ARBITRAGE FUND
Institutional (ARBNX) Retail (ARBFX) C Share (ARBCX) A Share (ARGAX)
Ordinary Income $0.13303 $0.08743 $0.00129 $0.10422
Short-Term Capital Gain $0.27948 $0.27948 $0.27948 $0.27948
Long-Term Capital Gain $0.08402 $0.08402 $0.08402 $0.08402
Total $0.49653 $0.45093 $0.36479 $0.46772
THE ARBITRAGE EVENT-DRIVEN FUND
Institutional (AEDNX) Retail (AEDFX) C Share (AEFCX) A Share (AGEAX)
Ordinary Income $0.05862 $0.02576 $0.00000 $0.02877
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.05862 $0.02576 $0.00000 $0.02877
THE ARBITRAGE CREDIT OPPORTUNITIES FUND
Institutional (ACFIX) Retail (ARCFX) C Share (ARCCX) A Share (AGCAX)
Ordinary Income $0.04757 $0.02437 $0.00000 $0.04477
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.04757 $0.02437 $0.00000 $0.04477
THE ARBITRAGE TACTICAL EQUITY FUND
Institutional (ATQIX) Retail (ATQFX) C Share (ATQCX) A Share (ATQAX)
Ordinary Income $0.00000 $0.00000 $0.00000 $0.00000
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.00000 $0.00000 $0.00000 $0.00000
11.17.2017
Arbitrage Funds 2017 Year-End Distribution Estimates

The Arbitrage Funds will be making year-end distribution payments for 2017 with a record date of 12/13/17, an ex-dividend date of 12/14/17, and a payable date of 12/15/17. As of 10/16/17, the estimated distribution amounts are as follows:

THE ARBITRAGE FUNDS – 2017 DISTRIBUTION ESTIMATES
Ordinary
Income
Short-Term
Capital Gain
Long-Term
Capital Gain
Total
Arbitrage $0.1012 $0.2256 $0.0594 $0.3862
Arbitrage Credit Opportunities $0.0290 $0.0000 $0.0000 $0.0290
Arbitrage Event-Driven $0.0929 $0.0000 $0.0000 $0.0929
Arbitrage Tactical Equity $0.0107 $0.0000 $0.0000 $0.0107

The information provided is an ESTIMATE and is subject to change.

11.9.2017
AT&T/Time Warner - Notes from the Desk

Recent news regarding ongoing negotiations between AT&T and the US Department of Justice has led to volatility in the company's proposed acquisition of Time Warner over the past week. For more information on what is happening and our thoughts on the prospects for the deal, please visit our Research page to access an update from our investment team.

8.17.2017
Recent Volatility in Merger Arbitrage

Some investors have witnessed an increase in the volatility of broad merger arbitrage returns over the past few weeks. Visit our Research page to access a piece with our investment team's thoughts on the primary drivers behind this phenomenon.

12.15.2016
Arbitrage Funds 2016 Year-End Distributions

The Arbitrage Funds will be making the following year-end distribution payments for 2016 with a record date of 12/14/16, an ex-dividend/reinvest date of 12/15/16, and a payable date of 12/16/16:

THE ARBITRAGE FUND
Institutional (ARBNX) Retail (ARBFX) C Share (ARBCX) A Share (ARGAX)
Ordinary Income $0.00000 $0.00000 $0.00000 $0.00000
Short-Term Capital Gain $0.11374 $0.11374 $0.11374 $0.11374
Long-Term Capital Gain $0.00909 $0.00909 $0.00909 $0.00909
Total $0.12283 $0.12283 $0.12283 $0.12283
THE ARBITRAGE EVENT-DRIVEN FUND
Institutional (AEDNX) Retail (AEDFX) C Share (AEFCX) A Share (AGEAX)
Ordinary Income $0.00000 $0.00000 $0.00000 $0.00000
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.00000 $0.00000 $0.00000 $0.00000
THE ARBITRAGE CREDIT OPPORTUNITIES FUND
Institutional (ACFIX) Retail (ARCFX) C Share (ARCCX) A Share (AGCAX)
Ordinary Income $0.09550 $0.08815 $0.06862 $0.08828
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.09550 $0.08815 $0.06862 $0.08828
THE ARBITRAGE TACTICAL EQUITY FUND
Institutional (ATQIX) Retail (ATQFX) C Share (ATQCX) A Share (ATQAX)
Ordinary Income $0.00000 $0.00000 $0.00000 $0.00000
Short-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Long-Term Capital Gain $0.00000 $0.00000 $0.00000 $0.00000
Total $0.00000 $0.00000 $0.00000 $0.00000
11.21.2016
Arbitrage Funds 2016 Year-End Distribution Estimates

The Arbitrage Funds will be making year-end distribution payments for 2016 with a record date of 12/14/16, an ex-dividend date of 12/15/16, and a payable date of 12/16/16. As of 10/31/16, the estimated distribution amounts are as follows:

THE ARBITRAGE FUNDS – 2016 DISTRIBUTION ESTIMATES
Ordinary
Income
Short-Term
Capital Gain
Long-Term
Capital Gain
Total
Arbitrage $0.069664 $0.245375 $0.024261 $0.339300
Arbitrage Credit Opportunities $0.039116 $0.000000 $0.000000 $0.039116
Arbitrage Event-Driven $0.000000 $0.000000 $0.000000 $0.000000
Arbitrage Tactical Equity $0.000000 $0.000000 $0.000000 $0.000000

The information provided is an ESTIMATE and is subject to change.