Paulson Merger Funds On Track In First Quarter

Amid the highest global merger and acquisition quarterly activity in five years, the Paulson Merger Funds low volatility arbitrage strategy returned near 2% in the first quarter of 2014.   After a strong start to the year, gains near 3.7% returns and near 7.4% in the enhanced funds in February were nearly taken back in March.  Spreads upon which the arbitrage strategy depend remained tight in the first quarter, the report noted, averaging 3% to 6% “with little perceived risk,” an investor letter reviewed by ValueWalk said. The portfolio de-emphasized low yield simple spreads, focusing instead on complex deal structures,…