After a first investment in the credit strategy offered by Eiffel Investment Group in last May, Emergence has made its second seeding partnership with Bernheim, Dreyfus & Co.
Emergence invested approximately USD40 million in the fund Diva Synergy Ucits, bringing its assets to over USD50 million, a critical size requested by many European institutional investors. The Emergence investment not only recognises the managers’ quality but will also contribute to the acceleration of its development.
Launched in mid-2011, the Diva Synergy UCITS Fund pursues an absolute return strategy focusing on equity M&A situations in Europe and North America and offers daily liquidity. The fund deploys its capital in two sub-strategies: merger arbitrage (announced transactions) and pre-event (expected transactions), and relies on strong fundamental analysis. The fund is market neutral and aims at delivering absolute returns, uncorrelated with market performance.
The Diva Synergy UCITS Fund is run by three highly complementary portfolio managers: Lionel Melka (former investment banker specialised in M&A), Amit Shabi (10-year previous experience in capital markets) and Sébastien Dettmar (experience in risk management at LCF Rothschild). The team also gathers several financial analysts and risk/ops professionals.
The managers have been successfully implementing this strategy through their offshore fund for almost 6 years and have received numerous awards for their performance, notably the top performing Merger Arbitrage fund over the past 3 years award from BarclayHedge in March 2012.
In January 2012, Lionel Melka and Amit Shabi cosigned the French reference book on merger arbitrage, ‘L’Arbitrage Sur Fusions Et Acquisitions’ (Editions Economica).
The fund is currently perfectly positioned to benefit from a pick-up in M&A activity. Corporates and private equity houses are sitting on huge amounts of liquidity, waiting to be deployed. Interest rates are low, public companies valuations reasonable and growth remains more efficiently achieved externally, through acquisitions, than organically. The progressive resolution of macroeconomic uncertainties, especially in Europe, should encourage CEOs to look for acquisition opportunities.
The initial investors of the Emergence fund, all major French institutional investors, oversee more than USD1.5 trillion of financial assets.