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Digital Subscriptions > The Hedge Fund Journal > Issue 116 - September 2016 > Syquant Helium UCITS: Alpha from Mergers and Events

Syquant Helium UCITS: Alpha from Mergers and Events

Cautious, diversified approach

Event-driven and merger arbitrage strategies often have a long equity bias, but Helium’s strategy is distinguished by being “mainly market neutral” says Syquant Capital's CIO Henri Jeantet, who adds that “the art of being boring is a key asset in our investment style especially when markets get to be turbulent or investors are alerted by a major deal break in the M&A spectrum”.

The firm’s Helium Opportunities fund received three awards for best performance in the Merger Arbitrage category, based on risk-adjusted returns over one, two and three years to 2015, in THFJ’s 2016 UCITS Hedge awards. The flagship fund has printed a Sharpe of around three.

Source: Syquant

Syquant Capital was founded in 2005 and started out running its strategy as a very low volatility, cash or bond substitute, in a Cayman structure. The firm later re-domiciled to UCITS and decided to offer investors a menu of three volatility targets. The highest risk funds have been making high single digit returns in 2015 and 2016 with a respective Sharpe of 2 and 1.5. Having originally been seeded by the CEO of Exane, most of the $2bn asset base now comes from institutional investors (including pension funds, insurers, asset managers, endowments and family offices).

Deal selection - and avoiding deal breaks - have contributed positively and the managers have also been very flexible and opportunistic in varying their exposure to the core merger arbitrage strategy: it has ranged from 12% to 100% between 2012 and 2015. Syquant estimates that discretionary selection of deals has accounted for around 50% of alpha, while tactical allocation to strategies and positions has made up the other half.

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