In this video, DailyAlts publisher and editor Brian Haskin interviews Roy Behren and Michael Shannon of Westchester Capital Management. Their firm has $6 billion in assets under management, and it utilizes a variety of strategies in vehicles for both institutional and retail investors. Its chief strategy, however, is merger-arbitrage, and the firm also runs an event-driven fund, of which merger-arbitrage is a key component.
Although people commonly assume that merger-arbitrage is a “risky” strategy, their assumptions are wrong. Mr. Behren, a former prosecutor for the SEC, says Westchester’s portfolios have low standard deviations, a common assessment of risk; and Mr. Shannon explains that a lot of the firm’s growth came after 2008, when investors were looking for better ways of controlling risk within their portfolios. In addition, Mr. Behren says merger-arbitrage strategies should perform well under a rising-rate environment.
This video was filmed at the Investing in Liquid Alternatives conference held in New York City.
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