Risk Arbitrage: An Investor's Guide

By Keith M. Moore

Book Overview

A much-needed, up-to-date primer on the risk arbitrage investment process. Widely popular during the M&A boom of the early '80s, risk arbitrage is making a comeback. This complete resource takes investors through the ins and outs of risk arbitrage, explaining how it works and how to apply it in real-world situations. It also presents a systematic approach to risk arbitrage techniques that work in today's market.

• Format: Hardcover
• Language: English
• ISBN: 0471248843
• ISBN13: 9780471248842
• Release Date: September 1999
• Publisher: Wiley
• Length: 304 Pages
• Weight: 1.28 lbs.
• Dimensions: 1.0" x 7.7" x 9.3"

Customer Reviews

Risk Arbitrage Analysis Framework

This book outlines a solid framework to assess risk arbitrage opportunities. The author describes types of transactions and the elements of return, risk, and probability to systematically analyze a deal. A number of useful formulas are included. However, a more thorough discussion on collar deals would be helpful.

Acurate and detailed explanation of the R.A business

Keith Moore goes in depth into the Risk Arbitrage world, with usefull and simple examples. His analysis progresses at the right speed enabling young professional to understand fundamental issues easily and with steady progress.The experienced Risk Arbitrageur will also find in it a usefull reference guide with interesting issues discussed.

Clear, Thoughtful Blueprint to an Ellusive Investment Arena

I'm surprised this book does not receive more attention as it is apparently the first book in a long while to give a careful treatment to the alluring and ellusive business of risk arbitrage. The book's primary merit is its author's clarity --beginning with a clear anecdote to illustrate why the business is called RISK arbitrage. Then, the author helpfully dissects risk arbitrage analysis into its most practical three analytic components: rate of return, risk and probability. He offers, with careful descriptions and examples, several mathematical models to aid in the assessment of these three areas, including a model which melds all three via a risk-adjusted rate of return calculation. The author makes application of these models to cash tenders (friendly and hostile), stock for stock transactions (with and without collars), complex deals involving cash, stocks warrants, bonds etc., and he devotes an entire chapter to hostile takeovers. He discusses portfolio management at length, with handy illustrations of how might one implement the use of spreadsheets, and also discusses hedging strategies fairly carefully. It is a great introduction to an investment arena long in need of a reliable navigator.The book would get 5 stars if not for a teaser the author doesn't address quite as thoroughly as the rest of his text dictates: he discusses hostile takeovers at length with special emphasis on several anecdotes, but he describes events as they unfold with third-party detachment...whereas I imagine most readers really want to know how each new turn might affect his analysis and computations. But this criticism is a small quibble, and the author deserves tremendous credit for clearly describing a great deal in a short amount of space.

A valuable risk arb reference

This book is a great text for seasoned professionals down to students of the game. A valuable reference that my colleagues and I found to be applicable to many of the deals we are currently following.