Versor's Gurnani Sees Strength in Merger Arb Strategy

The video discusses the current favorable conditions for merger arbitrage strategies, highlighting strong deal flow and narrow spreads. It also examines the high cash reserves in private equity and strategic buyers, suggesting continued acquisition activity. The potential impact of tax changes on private equity is considered, though deemed too early to predict significant effects.

What is a key factor to consider when evaluating spreads in the current financial environment?

• The number of deals announced

• The risk-free rate

• The amount of cash reserves

• The level of strategic buyers

What has been the trend in deal flow from the second half of last year to the first quarter of this year?

• It has been strong and consistent

• It has been unpredictable

• It has remained stagnant

• It has decreased significantly

What is the current status of cash reserves for private equity funds and strategic buyers?

• At the highest level this century

• At a moderate level

• At the lowest level this century

• Depleting rapidly

What is expected to happen to the high level of market activity as the environment normalizes?

• It is expected to cease

• It is expected to fluctuate

• It is expected to decrease

• It is expected to continue

How are potential changes to taxes on capital gains expected to impact private equity activity?

• They are expected to cause a significant decline

• They are expected to have no impact

• They are expected to increase activity

• It is too early to determine the impact