Maxam Arbitrage Fund
an alternative strategy with a compelling risk-adjusted return profile.
The Maxam investment team has over 12 years of experience managing arbitrage strategies within the Maxam Diversified Strategies Fund. We employ a quantitative and qualitative data-centric process to build an optimal reward-to-risk portfolio.
Benefits of arbitrage:
Merger arbitrage is an absolute return investment strategy whereby an investor seeks to profit from the successful completion or ‘closing’ of announced merger and acquisition (“M&A”) transactions, or other corporate reorganizations.
The arbitrageur takes a long position in the target company, following the announcement of the transaction, at a discount to the contracted acquisition price and, if applicable, simultaneously sells short the acquiror’s stock at a ratio equivalent to the share consideration offered.
The arbitrageur profits when the acquiror successfully completes the acquisition at the contracted price. The arbitrageur’s profit is dependent on the successful completion of the acquisition, uncorrelated with market performance.
An example of merger arbitrage:
It is about SPAC arbitrage for us, not SPAC speculation.
Special purpose acquisition company (“SPAC”) arbitrage is a unique strategy whereby an investor seeks to harvest yield-like returns, and upside exposure to a future unknown acquisition, while maintaining certainty on downside value, or risk.
In a typical offering, a SPAC completes an IPO at $10.00 per unit. The SPAC management team then has a contracted timeframe to pursue an acquisition. While management searches for an acquisition, the IPO proceeds are held in escrow in a trust account and accrue interest.
Similar to a merger arbitrage scenario, SPAC units or shares may trade at a discount to their NAV or trust value. When SPAC management identifies a target acquisition, the proposed transaction is presented to shareholders for a vote. At that time a shareholder can choose to:
The arbitrageur will choose the action that optimizes their return with the least amount of risk.
An example of SPAC arbitrage:
The Maxam Arbitrage Fund is an alternative mutual fund offered via simplified prospectus, also known as a liquid alternative fund.
Liquid alternative investments (or liquid alts) are mutual funds that aim to provide investors with diversification and downside protection through exposure to alternative investment strategies. Please contact us to learn more
Maxam Capital is an independent alternative investment management firm located in Vancouver, Canada.
A liquid alternative arbitrage fund. An uncorrelated alternative to traditional equity and fixed income strategies.
Looking for opportunities beneath the surface. An award winning, value-focused, event driven fund.