As an investment class, Merger-Arbitrage has one of the highest Sharpe Ratios of any hedge fund category. It is an excellent portfolio diversifier, having low correlation with both stocks and bonds.
The strategy Constantia Capital uses benefits from rigorous research coupled with many years of experience, strong risk controls, nimble trading, a separate account structure and fees that are much lower than average.
According to Harvey Fram, Founder, “Despite the headwinds of a falling stock market and rising interest rates, our Merger-Arbitrage strategy has managed to post positive returns year-to-date, once again proving its benefits as an excellent portfolio diversifier.”
The firm, based in the Princeton, NJ area, primary focus is on Merger-Arbitrage Investment Management (a fixed-income alternative). In addition, they employ a proprietary quantitative model to manage US Equity portfolios.
Looking forward, Mr Fram believes that 2023 will be an above average year since Merger-Arbitrage investments invariably are structured as short term interest rates plus a risk premium. With short-term US government bond yields at their highest levels since 2008, that should boost returns in this strategy.
5-Star Testimonials Include
“I’ve been a Constantia Capital client since March 2016. I had heard of Merger-Arbitrage before, but never really paid attention to it until the Constantia team introduced me to how it conservatively earns a low-risk return that’s better than traditional fixed-income funds. I especially appreciate the personal relationship and detailed explanation of the recent transactions that contributed (or not) to the monthly net.” Bob
“Constantia Capital has provided excellent service and results with their Merger-Arbitrage fund. Our goal was to hold some money in a stable investing fund that would beat the rise in the cost of college education. Harvey and the team explained how Merger-Arbitrage would be a good fit for that purpose and took the time to detail how it was able to achieve a higher degree of stability than other stock market based funds. Returns have been ahead of the initial predictions and we are very happy with our choice to use Constantia Capital.” Pete
“The Merger-Arb investment product has been very useful in our cash management program. We operate commercial real estate with cash reserves for capital repairs and upgrades. The M-A returns have ensured that the buying power of those reserves is maintained over the years. In fact, the returns have substantially exceeded alternative interest rate products such as CDs and MMAs. Very pleased with this investment and we have added to our account as a result.” Rich
About Harvey Fram
Harvey Fram, CFA, Chief Investment Officer and Portfolio Manager, founded Constantia Capital in 2013, and is the Portfolio Manager for its Merger-Arbitrage and Large-Cap 130/30 strategies.
Prior to that, he was the Lead Portfolio Manager for the core equity team of New York Life’s Madison Square Investors for 13 years, earning a 4-star Morningstar rating. He earned his MBA from the Wharton School at the University of Pennsylvania, as well as undergraduate engineering and computer science degrees in South Africa.
Constantia Capital LLC
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Candour Today journalist was involved in the writing and production of this article.