Paris-based M&A investment manager, Bernheim, Dreyfus, has reported continuing strong performance for its flagship Diva Synergy Enhanced Fund through 2010. In the 12 month period, the Fund’s dollar class gained 27.35% net and the euro class 27.91%.
Diva Synergy’s strong performance reflects, to some extent, a growth in mergers and acquisitions globally. According to Bernheim, Dreyfus’s January research letter: “The value of worldwide M&A totalled USD2.4 trillion during the full year 2010, a 23% increase from comparable 2009 levels and the strongest full year period for M&A since 2008".
Looking forward, the letter anticipates “deal activity will remain solid, focused around strategic deal-making. Resurgent leveraged buyout activity is supported by favourable conditions in the credit markets.”
Bernheim, Dreyfus’s research predicts M&A activity during 2011 will be particularly buoyant in three sectors: IT; financial; and healthcare.
There were more than 70 tech/IT acquisitions – lathe and small – by the major industry leaders in 2010, compared to 33 in 2009 and 55 in 2008. The tech sector is certainly recovering from the recession and not shying away from deals.
With new government regulations on the books or being written in response to Dodd-Franks, many of the big banks will be looking to unload certain riskier business units, like those tied to derivatives and hedge funds. Other companies will be eager to jump in and enter the lucrative areas of financing and banking.
Big pharmaceutical companies like Eli Lilly, Pfizer and Merck, along with biotech firms and those in the health care services sectors will all be on the prowl. Increasing demand from an ageing population, health care legislation and expiring patents creates the need to buy smaller biotech firms with new drug discoveries.
