Why 2022 Was Such a Wild Year for Traders Who Bet on Dealmaking
- Antitrust concerns, macro headwinds push deal spreads wider
- Microsoft-Activision in focus with lucrative upside potential
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It was one of the wildest years ever to be a merger arbitrage trader, but betting on 2022’s megadeals still turned out to be worth it…just.
Several arbitrage funds, which make — and lose — money based on their traders’ ability to predict the outcomes of dealmaking among public companies, managed to eke out gains this year, despite broader market turmoil that’s left major equities indexes nursing double digit losses. While their profits were modest compared to recent years, it’s a dramatic turnaround from midyear, when many looked poised to follow the benchmarks down.