Event-driven hedge funds, recently seen as laggards in the hedge fund world, have outperformed since the last week of March, according to market data from asset manager Lyxor.
The data is relevant as event-driven strategies were recently seen to lead losses during the first quarter, according to earlier analysis by HFR.
However, Lyxor said event-driven strategies outperformed in the last week of March and continued to be “solid” through April.
Merger arbitrage, for example, returned 3.8% during the month-to-date April 21, according to analysts at Lyxor writing in ‘The Weekly Brief’ published April 27. They said deal flow could have supported the strategy.
Also, special situations funds and directional long/short – two more types of event-driven funds – returned 3.8% and 1.7%, respectively. The analysts said these strategies have high beta, meaning they will benefit from the market rebound seen since March 23.
HFR data showed that event-driven saw 15% losses during the first quarter.
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