Looking to generate low risk income?
Consider the Merger-Arbitrage strategy
from Constantia Capital.
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Merger-Arb is an excellent strategy to diversify your fixed-income portfolio away from intermediate and long-term bond funds which are very susceptible to rising interest rates, and shorter-term money market funds which earn low returns.
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The current environment, with an above average number of deals, has enabled us to generate positive returns in the past 12 months despite the headwinds of a falling stock market and rising interest rates. With fees of only 70 basis points, this is the same time-tested strategy employed by hedge funds, now available at a fraction of their fees and with no lockups. Simply open your own SIPC-insured account at your favorite discount broker ($110,000 minimum), assign trading authority to Constantia Capital, and get the benefit of your broker's low rates and our portfolio management expertise. Click here to request a detailed presentation.
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The Constantia Capital "Merger-Arb" strategy is a short duration, low volatility strategy that is designed as an high yielding alternative to cash in the bank or short-term debt. Volatility is similar to that of a U.S. Government 10-year Treasury Note.
This strategy invests in definitively announced mergers. We follow a highly disciplined process to keep risk low.
Performance
Since its inception in November 2011, the Constantia Capital Merger-Arbitrage strategy has earned 5.06% annualized (net of fees) with a 0.86 Sharpe Ratio. See More Details About Merger-Arbitrage Performance
Advantage of Separately Managed Accounts
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No drag on performance due to trading to meet cash flows of other investors. This is especially important for Merger-Arb where the bid-ask spread can make the difference between an attractive trading opportunity.
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Lower overhead since no fund accounting fees. As a result, our fees are the lowest in the category, lower than either ETF’s, Mutual Funds or Hedge Funds.
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We estimate the above two points provide an advantage over a fund structure of at least 50 bps annualized, more when comparing to higher fee competitors.
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Choice of fee structure: either a flat rate (70 bps) or performance based (“0 and 20”).
*Please note that Expected Excess Returns (a) are not a guarantee of performance and (b) will include reinvestment of dividends and other earnings.
¹ Discounted fees are available to accounts over $25 million.
² Performance Fee is charged on excess over benchmark, with high-water marks, and available only to qualified clients as defined by Rule 205-3 of the Investment Advisers Act of 1940 (17 CFR 275.205-3).
Risk Controls
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Highly diversified portfolio with approximately 100 positions (as of Q2 2023). Positions size may not exceed 5% of the portfolio, but we seldom come close to that limit with the average position being less than 1% of the portfolio.
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Leverage may be used (for traditional accounts) but will not exceed 2.0.