BlackRock has launched a new event-driven fund in Europe to meet growing investor demand for liquid alternative investments, and to take advantage of an attractive environment for company transactions and other corporate actions.
The BlackRock Strategic Funds (BSF) Global Event Driven Fund (the Fund) is the firm’s first UCITS-compliant event-driven fund in Europe and adds to BlackRock’s existing range of liquid alternative UCITS funds on the BSF platform. The Fund arrives at a time when increased market volatility and challenging returns from traditional equities and bonds are encouraging investors to seek alternative, uncorrelated returns.
Sheryl Needham, Managing Director, BlackRock Alternatives Specialists, in Europe, says: “Investors are increasingly demanding all-weather investment solutions that provide a different set of returns to equities and bonds, reduce portfolio volatility, and offer downside protection. This event-driven fund provides investors with exposure to a large, global investable universe that is designed to promote an uncorrelated return profile.”
The Fund is managed by Mark McKenna, Global Head of Event-Driven Equity at BlackRock, who joined the firm last year from Harvard Management Company (HMC) where he co-founded HMC's event-driven strategy. Prior to joining HMC, Mark was a Portfolio Manager for the event-driven strategy at Caxton Associates. Earlier in his career, McKenna worked at Salomon Smith Barney where he advised on over USD100 billion in corporate transactions. Mark leads a team of seven who collectively have several decades experience both in corporate transaction advisory and event driven investment management.
The Fund focuses on investments across a wide spectrum of corporate events, from announced mergers, spin-offs and restructurings, to synergistic acquisitions and collaborative activism, among others. The Fund will predominantly invest in equity securities as well as opportunistically across the capital structure, making long, synthetic long and synthetic short investments across a diversified set of industries and sectors in developed markets.
McKenna says: “The opportunity set for event-driven strategies is highly robust. Driven by tepid organic growth, peak margins, and high corporate cash balances, CEOs are compelled to pursue strategic imperatives to drive shareholder value. This has already resulted in a bumper year for M&A activity in 2015 and we believe high levels of all corporate activity across the event catalyst spectrum will continue, providing opportunities to exploit the value gap created from these transformative corporate events.”
BlackRock’s Global Event-Driven team will leverage BlackRock’s global investment platform, access to corporate management, and the firm’s proprietary risk management platform, Aladdin, to generate alpha. The investment team manages a US event-driven mutual fund, which leverages the same research and investment process.
