Despite steady performances in past years, many fund of fund managers believe convertible arbitrage is heading into a stiff tail wind.
'Every four years the convertible arbitrage sector blows up, it is like the Olympic Games,' says David Smith, who at Global Asset Management runs $6.5bn in hedge strategies. 'We saw that in 1994, 1998 ' and what year is it this year?'
But the bad news is yet to be revealed by the statistics. The current batch from Standard & Poor's shows a good return from 1/2/199
The week on Risk.net, August 4–10Receive this by email