The Touchstone Arbitrage Fund seeks to achieve positive returns regardless of market conditions over the long term. It primarily invests in securities of companies involved in publicly announced mergers and other corporate reorganizations that have been defined and disclosed.
Merger arbitrage is an investment strategy that seeks to capture the arbitrage spread represented by the difference in the market price of the securities of the target company and the value that is offered for these securities by the acquiring company. Non-deal arbitrage and fixed income complement the fund’s merger arbitrage investments.
The fund will be offered across several share classes. It is subadvised by Longfellow Investment Management Company, which also serves as subadvisor to the Touchstone Merger Arbitrage Fund.
“Volatile equity markets and an uncertain interest rate path have prompted many investors to embrace alternative sources of investment returns. Just like the Touchstone Merger Arbitrage Fund, which is closed to certain new investors, the Touchstone Arbitrage Fund represents one such alternative for investors seeking low-correlated returns to traditional stocks and bonds,” said Steven Graziano, president of Touchstone Investments, Cincinnati, Ohio.
Identifying, quantifying and managing risk forms the foundation of Longfellow’s strategy. Focus is placed on what are considered to be deals of publicly listed and traded equity securities tied to mergers and acquisitions, supplemented by fixed income and other arbitrage and event-driven investments. The fund’s portfolio management team includes Alexander R. Graham, Barbara J. McKenna, David C. Stuehr and John E. Villela. Collectively, the team represents more than four decades of arbitrage investing experience.