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Manager League Tables

So many mergers, so little alpha

July 26, 2021

Mergers have been frothy these past few, well, decades, yet alpha from the merger arb strategy remains elusive. Novus tracks 10 firms that invest in stocks of both parties to a merger, and only two of them have positive alpha over the past three years -- and frankly not positive by much. Lesson to be learned: Merger arb is really, really hard.

It's telling that Manikay Partners, leading the field with a whelming 459.22 annualized basis points, has been moribund since the start of the Covid-19 pandemic. Chesapeake Partners Management, the other marginal winner, shut down even before that.