8 Oct 2010
By Bill McIntosh
A geared event driven hedge fund run by Bernheim, Dreyfus & Co. has raced ahead to a 27% rise over the first nine months of 2010 capped by a 9% gain in September, placing it in the top performing decile of event driven strategies worldwide.
The Diva Synergy Enhanced Fund and its unleveraged sister fund, the Diva Synergy Fund, have a track record stretching back nearly four years. The unleveraged fund has posted annualised performance of 6% (with volatility of 3.5%), while the leveraged fund has made an annualised gain of 13% (with volatility of 10%) since inception. The funds have combined assets under management of $100 million.
The event driven strategy is focused on mid and large cap stocks in the pharmaceutical, energy and technology sectors across Europe, the UK and North America. The portfolio is spread across 35 to 45 positions at any given time to minimise concentration. The fund uses two main strategies: classical merger arbitrage and special situations where it seeks to identify stocks that will be bid for in the next three to six months.
“We have a very liquid portfolio,” Shabi said. “We can sell the entire portfolio over one trading day without moving the stock prices.” The liquidity meant that the fund didn’t gate during the 2008-09 market downturn.
Research from Blenheim, Dreyfus notes that the third quarter of 2010 was the busiest quarter for M&A in two years with $563 billion of announced transactions. This is being fuelled by companies having nearly $3 trillion of cash reserves and record-low borrowing costs.
Bernheim, Dreyfus was founded in 2006 in Paris. It addition to Shabi its portfolio managers include Lionel Melka, who heads research, and Sebastien Dettmar. Melka has a decade of experience as an M&A advisor for blue chip clients in banks including Lazard, Calyon and LCF Rothschild, and has been involved in more than 20 major transactions totaling over $50 billion.
Amit has experience in asset management and as a broker of over-the-counter hedging strategies in for Rothschild, Man Group and others. Dettmar has worked as a risk manager and as Head of Quantitative Research of LCF Rothschild with €15 billion AUM where he established the strategic direction and risk tolerance standards.
Newedge is the fund’s prime broker. The minimum investment is $100,000 or €100,000 with monthly liquidity and no lock up.
A geared event driven hedge fund run by Bernheim, Dreyfus & Co. has raced ahead to a 27% rise over the first nine months of 2010 capped by a 9% gain in September, placing it in the top performing decile of event driven strategies worldwide.
The Diva Synergy Enhanced Fund and its unleveraged sister fund, the Diva Synergy Fund, have a track record stretching back nearly four years. The unleveraged fund has posted annualised performance of 6% (with volatility of 3.5%), while the leveraged fund has made an annualised gain of 13% (with volatility of 10%) since inception. The funds have combined assets under management of $100 million.
“We are seeing more and more M&A activity,” said portfolio manager Amit Shabi, of Bernheim, Dreyfus & Co, who also heads trading. “The more M&A activity there is the more choice we have in the portfolio. It is a good time for event driven funds.”
The event driven strategy is focused on mid and large cap stocks in the pharmaceutical, energy and technology sectors across Europe, the UK and North America. The portfolio is spread across 35 to 45 positions at any given time to minimise concentration. The fund uses two main strategies: classical merger arbitrage and special situations where it seeks to identify stocks that will be bid for in the next three to six months.
“We have a very liquid portfolio,” Shabi said. “We can sell the entire portfolio over one trading day without moving the stock prices.” The liquidity meant that the fund didn’t gate during the 2008-09 market downturn.
Research from Blenheim, Dreyfus notes that the third quarter of 2010 was the busiest quarter for M&A in two years with $563 billion of announced transactions. This is being fuelled by companies having nearly $3 trillion of cash reserves and record-low borrowing costs.
“I think we are in the beginning of the MA cycle,” said Shabi. “We have three or four years ahead of us. We feel there is a lot of appetite for our strategy because investors believe we are at beginning of a cycle. And there is a lot of interest in our fund because of our good track record.”
Bernheim, Dreyfus was founded in 2006 in Paris. It addition to Shabi its portfolio managers include Lionel Melka, who heads research, and Sebastien Dettmar. Melka has a decade of experience as an M&A advisor for blue chip clients in banks including Lazard, Calyon and LCF Rothschild, and has been involved in more than 20 major transactions totaling over $50 billion.
Amit has experience in asset management and as a broker of over-the-counter hedging strategies in for Rothschild, Man Group and others. Dettmar has worked as a risk manager and as Head of Quantitative Research of LCF Rothschild with €15 billion AUM where he established the strategic direction and risk tolerance standards.
Newedge is the fund’s prime broker. The minimum investment is $100,000 or €100,000 with monthly liquidity and no lock up.
