The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Corre: UK CMA was doing US bidding on Activision deal before reversing
“I think in hindsight, we recognize now that there was more dialogue between the U.S. And the U.K. Than we had appreciated, and they were probably doing the U.S.'s bidding in a certain way, which is Surprising, but then they really reversed course when the U.S.…”
Corre: M&A Deal Flow Will Rebound as Regulators Back Off Extreme Positions
“I'm actually pretty optimistic now that the administration seems to be pivoting away from some of these more extreme positions. They basically folded on Activision. They folded on Horizon. I'm pretty optimistic that once the corporates get the message that it'…”
Corre: Hedge funds hiring Rhodes Scholars signals a broken U.S. economy
“There's something wrong with the U.S. Economy if Rhodes Scholars are coming to work at a hedge fund”
Corre: Biden Administration Has Mostly Failed in Merger Antitrust Challenges
“Generally speaking, the administration has not been successful in those challenges.”
Corre: Spinoffs No Longer Provide Reliable Long Alpha but Create Dispersion
“That opportunity set is no longer as reliable source of alpha. It's actually still a very, very reliable source of dispersion, But there are good shorts along with the good longs.”
Corre: Creditor-on-creditor violence will decline in a true distress cycle
“I'm optimistic that that will get somewhat less violence if we see a real distress cycle”
Corre: China is a black box where due diligence leads to arrests
“And obviously, China is increasingly a black box. It's very hard to do due diligence there. In fact, they've arrested people for it.”
Corre: EU accepts antitrust behavioral remedies because enforcement is more efficient
“And the European Union is very, very willing to accept behavioral remedies, partially because I think their enforcement mechanisms are a little bit more efficient. So if they see a problem, they can address it. Whereas in the US, the enforcement mechanisms are…”
Corre: Microsoft's acquisition of Activision will get completed
“And it's still not done, but we feel pretty good that it's going to get done.”
Corre: Event-driven investing now requires fundamental analysis, not just event dynamics
“Now, I think partially because of the rise of passive and quant, partially because the Darwinian process has weeded out a lot of the alpha donors, it's not as simple as that anymore. You have to be much more focused on both the event dynamics, but also the fun…”
Corre: Giant position sizes force funds to miss lucrative smaller alpha
“So if you're looking for a 102 hundred million dollar positions, you're really missing out on some really interesting opportunities. And I used to complain that we can't bend down to pick up five million dollars. And sometimes when you bend down to pick up fiv…”
Corre: Restructuring experience teaches equity underwriting alongside legal dynamics
“One of the things I've always looked for is people who have restructuring experience, because I think restructuring experience is really where you get the combination of Equity underwriting and understanding the role of legal processes and group dynamics in te…”
Corre: 1999 Was the Most Golden Year for Merger Arbitrage
“I think what had happened was in 1998, there were a lot of catastrophic merger breaks. A lot of folks had left the strategy. So the imbalance between the capital demands for the arbitrageur services and the actual amount of arbitrage capital was out of whack. …”
Corre: Horizon and Seagen deals shared identical FTC drug-bundling regulatory risks
“Take, for example, there were two mergers. You had Horizon Therapeutics, and then you had Seattle Genetics. Totally different deals, but almost the exact same set of issues in terms of, is the FTC going to decide that There's some issue that they're going to t…”
Corre: Rapid Tech Disruption Makes Corporate Turnarounds Harder to Execute
“And one of the things that's happened over the years is that turnarounds have become more difficult because technology and the disruption from technology and the velocity of the change in that is so great that if you fall behind, it's very, very hard to catch …”
Corre: Bespoke Alternative Data Faces Less Competition in Event-Driven Equities
“What we find on the event driven side is that if you start doing bespoke work around situations that aren't going to be Obviously, the off the shelf providers, we can generate real opportunities, whether it's creating our own custom index from web scrapes of t…”
Corre: Rule 144A bond market is less efficient than public equities
“And so that market is a little bit more opaque. It's certainly less efficient than the equities market or even the investment grade market where folks can download that data and put it on their platform in a nanosecond.”
Corre: Offsetting alpha shorts with longs clarifies portfolio construction and alpha attribution
“We do alpha shorting, and when we do alpha shorting, we buy things long against it for the same reason. It's much cleaner from a portfolio construction perspective. It's also much cleaner from judging the quality of the position and the alpha generation of the…”
Corre: Multi-Manager Pods Have Compressed Friendly Merger Arbitrage Spreads
“The pod shops in merger arbitrage have become a very, very important player. Some of them do some amount of event-driven equities, but I think it's much, much more constrained because of the market neutrality that they run. But I think the biggest impact, I wo…”
Corre: Multi-Manager Pods Excel at Harvesting Short-Term Equity Alpha
“On the equity side, I think the pods have done just a terrific job in harvesting short-term alpha. Calling the quarter and things like that, they're just very, very good at.”
Corre: CLO Slowdown Is Creating Greater Concessions in Large Bank Debt
“Essentially the bank debt market, leverage loan market, I should say, has been really dominated by the CLOs. And that algorithm right now is broken. So CLO formation is harder now than it was before. There's less demand for the triple A tranches of CLOs. So wh…”
Corre: Governors Lane is buying mispriced Bausch + Lomb debt
“We're participating in the transaction that Bausch and Loma's doing. We think the rating is lower than it should be. It's rated B-one, in part because they have this dynamic with their old parent Valiant, or what is now called Bausch. We think the pricing is r…”
Corre: The trend toward globalization has dramatically slowed or reversed
“The trend towards globalization has clearly Slow dramatically, if not backed up.”
Corre: The European Commission has become a predictable and thoughtful regulator
“When I started doing merger arbitrage, the European Commission was a non-entity to American arbitrageurs. But since then, they've actually become a very predictable and quite thoughtful regulator.”
Corre: Merger arbitrage requires a 90%+ hit rate unlike general investing
“The great thing about this business, and the hardest thing about this business, is a lot of folks who are in our industry, there are people who got nineties and plus on every single one of their tests. And in investing, fifties, 55, 60 is pretty good. Now in a…”
Corre: Governors Lane Bought Luckin Coffee in Single to Low-Double Digits
“We bought a decent size position when the stock was trading low double digits, high single digits, and we did a lot of the work I was describing, a lot with the alternative data, some surveys, we spoke to franchisees in China about it, and we've sold a decent …”
Corre: The hedge fund graveyard is filled with firms that grew too big
“I want to grow responsibly, recognize the fact that the graveyard Of hedge funds is filled with hedge funds that did what we did and got too big and to grow with discipline in a way that allows us to continue to maintain the culture that has contributed to our…”
Corre: Multiples Are Merely Cash Flow Proxies, Not Standalone Buy/Sell Signals
“I think people fetishize multiples. And so often you hear people tell you, oh, the multiple is so low, we should be long, or the multiple is so high, we should be short. And multiples are a very reasonable proxy for the market's estimate of the net present val…”
Corre: Financial Markets Were Very Bad at Pricing Legal Risk in the Late 1990s
“And what I found was, this is in the late nineties, so things have changed a little bit. The market was really, really bad at pricing legal risk.”
Corre: Eton Park Shorted Credit Indices and Subprime Debt Early On
“At the time, we didn't have a dedicated credit effort, despite what I just mentioned to you, because the house view was that credit was so unattractive as an asset class. And we were, from almost day one, shorting pretty much every index. We eventually got inv…”
Corre: Arbitrageurs should have maximized exposure to 2009 Pfizer and Merck deals
“This was true in 2009 when Pfizer was buying Wyeth and Merck was buying Shearing Plow. Both were trading at really, really attractive spreads, but you had to say, look, they're both pharma deals. If there's going to be an issue, there could be an issue with bo…”