Key Takeaways
- • Glazer Capital runs three strategies: merger arbitrage, SPAC arbitrage and convertible arbitrage, with convertible positions typically held three to five years.
- • Founder, CEO and CIO Paul Glazer says the firm evaluates whether a convertible bond or the underlying equity is more attractive when a deal involves an outstanding convertible.
- • Global M&A deal value is on track to reach approximately $4tn, up 13% year-on-year according to PwC, which Glazer links to looser US regulation.
- • Glazer says approximately 95% of signed US merger agreements result in completed deals.
- • The firm opened a London office and sees opportunities in Japan and across APAC, as well as in deals above $10bn in biotech and pharmaceuticals.
Summary
Glazer Capital, led by founder, CEO and CIO Paul Glazer, operates three defined strategies: merger arbitrage, SPAC arbitrage and convertible arbitrage. Merger and SPAC arbitrage have defined endpoints, while convertible arbitrage is a longer-horizon strategy with typical maturities of three to five years. Glazer describes a deliberate "synergy" across the teams: when a deal involves an outstanding convertible bond, the firm assesses whether the convertible or the equity offers the more attractive exposure. He says the firm acts only on trades it has high conviction in, stating, "we are really looking to make money on every position we hold."
According to the interview, global M&A deal value is on track to reach approximately $4tn, up 13% year-on-year according to PwC, a trend Glazer attributes to a looser US regulatory environment that supports deal activity. He cites a statistic that approximately 95% of signed US merger agreements result in completed deals, with the remaining 5% more likely to carry greater regulatory or legal risk that may not yield returns. Glazer says the more favourable environment has been a significant advantage to the firm, and that Europe has begun to loosen its regulatory conditions in response to changes in the US, which he welcomes. The firm recently opened a London office to access this opportunity set and add on-the-ground resources.
The firm also sees opportunities across APAC. Glazer notes that Japan was historically hostile to M&A because deals were associated with job losses, given a social contract built around lifetime employment, but he says this has begun to shift over the past two or three years as the country confronts an aging and declining population. He also points to Japan's robust, well-developed legal system as supportive of investment.
On convertible arbitrage, Glazer notes that convertible issuance has reached record highs in recent years. He cites DoorDash, On Semiconductor and Ciena as issuers whose convertibles are investment grade or close to it, noting that the firm typically trades gamma and takes long volatility positions, and that issuers with volatile equities and strong credit quality are attractive. Looking ahead, Glazer says the continued M&A boom and growing number of deals above $10bn create opportunities, as larger transactions ease position-size constraints. He cites fertile opportunities in biotech and pharmaceuticals and is increasingly bullish on the firm's prospects, citing the addition of a dedicated technology team alongside what he describes as the "biggest and most active merger arbitrage team in the world."
According to the interview, global M&A deal value is on track to reach approximately $4tn, up 13% year-on-year according to PwC, a trend Glazer attributes to a looser US regulatory environment that supports deal activity. He cites a statistic that approximately 95% of signed US merger agreements result in completed deals, with the remaining 5% more likely to carry greater regulatory or legal risk that may not yield returns. Glazer says the more favourable environment has been a significant advantage to the firm, and that Europe has begun to loosen its regulatory conditions in response to changes in the US, which he welcomes. The firm recently opened a London office to access this opportunity set and add on-the-ground resources.
The firm also sees opportunities across APAC. Glazer notes that Japan was historically hostile to M&A because deals were associated with job losses, given a social contract built around lifetime employment, but he says this has begun to shift over the past two or three years as the country confronts an aging and declining population. He also points to Japan's robust, well-developed legal system as supportive of investment.
On convertible arbitrage, Glazer notes that convertible issuance has reached record highs in recent years. He cites DoorDash, On Semiconductor and Ciena as issuers whose convertibles are investment grade or close to it, noting that the firm typically trades gamma and takes long volatility positions, and that issuers with volatile equities and strong credit quality are attractive. Looking ahead, Glazer says the continued M&A boom and growing number of deals above $10bn create opportunities, as larger transactions ease position-size constraints. He cites fertile opportunities in biotech and pharmaceuticals and is increasingly bullish on the firm's prospects, citing the addition of a dedicated technology team alongside what he describes as the "biggest and most active merger arbitrage team in the world."
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