The M&A sector will continue to grow through next year creating an exceptional range of investment opportunities, says Paris-based hedge fund manager Bernheim Dreyfus.
“We believe the recent rebound in mergers and acquisitions is rapidly gaining momentum and we’re forecasting global deal activity to rise by as much as 36 per cent next year, by comparison to 2010,“ says Lionel Melka, portfolio manager and head of research at Bernheim Dreyfus. “This growth will take deal size up to USD3trn.”
Melka says the acceleration in M&A is exemplified by the recent deals such as Caterpillar/Bucyrus (USD7.2bn), EMC/Isilon (USD2.2bn) and Axa/Axa Pacific (USD13.1bn).
“We are convinced there are further deals like these down the pipeline,” he adds.
According to Barclay Managed Funds Report, the Diva Synergy Fund, managed by Bernheim Dreyfus, is one of the major beneficiaries of this strong business growth. Diva Synergy has recently been ranked sixth by Barclay in the worldwide merger arbitrage category for the past three years and the fund is also ranked best performer on year-to-date and last 12 months basis worldwide in its category by Barrons, Morningstar, Barclay Hedge and Eureka Hedge.
“We are entering a new M&A cycle. We’ve seen a surge in hostile takeovers, which usually happens in the beginning of a new cycle, we probably have three to four years of M&A activity growing from now on. The US market is definitely the one leading the cycle, normally there is a delay of six months to one year, for the European economy and confidence to follow,” says Melka.