Our Strategies
Focusing on events rather than markets, Water Island Capital takes an opportunistic and flexible approach to event-driven opportunities around the globe.
Event-driven investing is a highly specialized strategy designed to profit from the behavior of equity and debt instruments trading within the timelines of specific corporate events, such as mergers, acquisitions, restructurings, refinancings, recapitalizations, and distressed situations. In seeking to capture low-correlated absolute returns, Water Island Capital does not invest based on market fundamentals, but rather on event fundamentals.
When partnering with Water Island Capital, investors have access to global event-driven investing, including single-strategy and multi-strategy approaches in both fixed income and equities.
Merger Arbitrage
Our Merger Arbitrage strategy seeks to profit from the successful completion of definitive, publicly announced mergers and acquisitions in pursuit of absolute returns with low correlation to broader equity and credit markets. Our approach may utilize both the equity and credit securities of firms involved in announced transactions, along with hedging strategies designed to minimize market exposure and volatility.
Long/Short Equity
Our Long/Short Equity strategy employs an event-driven investment focus around a wide range of special situations such as spin-offs, restructurings, and speculative mergers and acquisitions. We look for equity securities that we believe are significantly mispriced and offer an attractive risk/reward opportunity. At the same time, we implement hedging techniques to minimize volatility and to isolate the alpha opportunity associated with the catalyst.
Catalyst-Driven Credit
Our Catalyst-Driven Credit strategy pursues a non-traditional approach to fixed income investing. This unconstrained, alternative credit strategy focuses on a broad range of catalysts and events such as refinancings, deep value opportunities, and reorganizations. We may hold both long and short investments, and may employ convertible arbitrage, merger arbitrage, or capital structure arbitrage techniques in order to exploit security mispricings or inefficiencies, while seeking to limit credit risk and interest rate risk.
Multi-Strategy Event-Driven
Our Multi-Strategy Event-Driven strategy invests in opportunities where the return potential is predicated on the outcomes of specific catalysts and corporate events rather than the overall direction of broader credit and equity markets. We implement our strategy via an optimized, blended approach to our three core investment capabilities, investing across both hard and soft catalysts. We adopt a flexible and cycle agnostic approach because different markets may offer different opportunities.