Latin Capital Management

An equity long-short strategy is an investing strategy, used primarily by hedge funds, that involves taking long positions in stocks that are expected to increase in value and short positions in stocks that are expected to decrease in value.

Fixed-income arbitrage is an investment strategy that exploits pricing differentials between fixed-income securities.

Distressed securities may be an attractive investment option for sophisticated investors who are looking for a bargain and are willing to accept some risk.

Distressed securities are securities; most often corporate bonds, bank debt and trade claims, but occasionally common and preferred stock as well, of companies that are in some sort of distress. Typically, that means heading toward or in bankruptcy.

Event-driven investing is an investing strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, merger, acquisition or spinoff.

To illustrate, consider what happens in the case of a potential acquisition. When a company signals its intent to buy another company, the stock price of the company to be acquired typically rises. However, it usually remains somewhere below the acquisition price—a discount that reflects the market’s uncertainty about whether the acquisition will truly occur.