Breakingviews - Deal gamblers didn’t heed 2020’s lesson

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Hedge fund giant Millennium has closed a group that bets on mergers. As similarly painful times in 2020 showed, the problem isn’t returns, it’s bailing on bets too soon, writes JMAGuilford.

$16.5 billion sale to Elliott and Vista Equity Partners looked wobbly for a while. East53 bet on all three.enlisted the French government in a dispute with seller Tiffany. Stocks dropped far below deal prices.

That can quickly make positions look like they are posting steep losses.Back in March 2020, arbs took a 10% hit initially, according to HFR. But they ended the year up 5%. The business isn’t for the faint of heart. Perhaps East53 just couldn’t roll with the punches.

 

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