Event-driven investing

Event-driven investing

Event-driven investing is a hedge fund investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as an earnings call, bankruptcy, merger, acquisition, or spinoff.

Event-driven investing strategies are typically used only by large institutional investors, such as hedge funds and private equity firms. That’s because traditional equity investors, including managers of equity mutual funds, do not have the expertise or access to information necessary to properly analyze the risks associated with many of these corporate events.

This strategy was successfully utilized by Cornwall Capital and profiled in "The Big Short" by Michael Lewis.

External links

  • Understanding Event-Driven Investing
  • Event-Driven Driven Strategy Outlook: Looking Beyond Merger Arb