Wednesday, June 12, 2024

Convertible arbitrage high on agenda in 2023

  • Strategy represented a tenth of hedge fund assets in pre-crisis heyday
  • Assets have doubled since 2018, with strong start to 2023
  • AFI Pro and Executive members have exclusive access to full analysis below

Once a core hedge fund strategy, assets in convertible arbitrage peaked at more than $100bn in 2004, making up about a tenth of the overall industry. The 2008 financial crisis ushered in a leaner period, with suppressed volatility dampening opportunities and assets falling.

But a possible renaissance is building steam, supported by the return of market volatility, more investor interest — leading to a buzz around convertibles — and strong performance at the start of 2023.

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