Special Situations

Special situations is an asset class where we attempt to take advantage of short-term anomalies in the market and seek absolute returns that are uncorrelated with the wider equity market.

For example, market anomalies occasionally present themselves in takeovers where the price of the target company does not rise to the bid price (less the time cost of money). Bid arbitrage occurs in times of high market volatility and presents very attractive risk/return profiles.

Alternatively there may be a specific event that will trigger a rise in the share price.

Our past stock selection has included:

Company Sector Rationale

Amlin

Non-Life Insurance

Share price should rise on the back of a benign hurricane season and low valuation

BG Group

Oil & Gas Producers

Potential takeover target for the likes of ExxonMobil

Carillion

Support Services

Will benefit from government cost cutting

Centamin Egypt

Mining

Potential takeover target, the AIM markets largest gold produce

These shares are bought with a very short term time horizon.

For investors with a higher risk tolerance, we can manage between 12.5% and 50% of the alternatives allocation in either options or CFDs.