Risk Arbitrage: An Investor's Guide [Hardcover]

Keith M. Moore (Author)

Book Description

Series: Frontiers in Finance Series | Publication Date: September 6, 1999

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.

Editorial Reviews

From the Inside Flap

The current wave of corporate mergers, acquisitions, restructurings, and similar transactions has created unprecedented opportunities for those versed in contemporary risk arbitrage techniques. At the same time, the nature of the current merger wave has lent such transactions a much higher degree of predictability than ever before, making risk arbitrage more attractive to investors of every stripe. Yet, surprisingly, there continues to be a near-total lack of instructional material for those interested in learning the latest risk arbitrage techniques. Now, in the first insider's guide to risk arbitrage to appear since Ivan Boesky's 1985 classic, Merger Mania, one of Wall Street's most successful risk arbitrageurs draws upon his three decades of experience to arm you with the knowledge and skills you need to know to make this powerful investment strategy work for you. Taking a systematic approach, Keith M. Moore gets you quickly up to speed on basic risk arbitrage concepts, terminology, and equations. He then walks you, step-by-step, through all the elements of the risk arbitrage process. And, with the help of numerous case studies and vignettes, he describes a complete methodology for safely navigating your way through the world of risk arbitrage. From researching prospects and determining your position, to hedging and trading tactics, Moore arms you with the full complement of sophisticated risk arbitrage techniques with which he has consistently realized substantial returns for his clients and himself. Risk Arbitrage is must reading for finance and investment professionals who want to take advantage of the nearly limitless opportunities afforded by today's rapidly changing global business environment.

From the Back Cover

Praise for Risk Arbitrage an Investor's Guide

"Never in history have there been so many mergers and takeovers like those in the late '90s! Keith Moore's Risk Arbitrage: An Investor's Guide is the first systematic attempt to break the silence around the secrets of the investment and trading strategy that exploits these corporate restructurings: risk arbitrage. This is not just a book about the secrets of risk arbitrage but a real textbook and investor's guide on how to trade the risk arbitrage special situations and about the risk arbitrage industry including hedge funds."
—Gabriel Burstein Head of Specialized Equity Sales and Trading Daiwa Europe, London

"I am delighted that Keith Moore has been able to write a book describing the business of risk arbitrage in such a user-friendly way. This is a work that will prove useful to investors ranging from novices to professionals and should be especially helpful to those teaching finance courses at our colleges and universities. Congratulations, Keith, on accomplishing what none of your predecessors could."
—George A. Kellner CEO, Kellner, DiLeo & Co.

"This book fills a surprising void on the subject of arbitrage at a time that could not be more propitious. It is written clearly and comprehensively and should be helpful to all who are interested in the subject, regardless of experience."
—Albert B. Cohen Albert B. Cohen Partners, LP

See all Editorial Reviews

Product Details

• Hardcover: 304 pages
• Publisher: Wiley; 1 edition (September 6, 1999)
• Language: English
• ISBN-10: 0471248843
• ISBN-13: 978-0471248842
• Product Dimensions: 9.3 x 7.7 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (12 customer reviews)
• Amazon Best Sellers Rank: #878,850 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

24 of 25 people found the following review helpful:

4.0 out of 5 stars Clear, Thoughtful Blueprint to an Ellusive Investment Arena, January 29, 2000

By 

S. Schneider (USA) - See all my reviews
(REAL NAME)   

This review is from: Risk Arbitrage: An Investor's Guide (Hardcover)

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.

15 of 20 people found the following review helpful:

3.0 out of 5 stars Too basic for me, December 4, 1999

By A Customer

This review is from: Risk Arbitrage: An Investor's Guide (Hardcover)

I've been investing for many years but only began investing in arbitrage situations over the past year. I found this book much too basic based on the knowledge I've already gained just by reading various tender offers, proxies and so on. Over 100 pages of the book is two reprints, one of a tender offer document and the other of a court case decision, with a few observations thrown in throughout the reprints. If you have no arbitrage experience it may helpful.

2 of 2 people found the following review helpful:

4.0 out of 5 stars Good Intro Book, March 7, 2002

By 

Tong Tsz Chiu Ambrose - See all my reviews
(REAL NAME)   

This review is from: Risk Arbitrage: An Investor's Guide (Hardcover)

As value investor, this book provides a good but simple understanding of what RA is. His experience in the industry is more interesting as others have noted. This book provides conceptual issues that can be applied to options, etc. WITHOUT knowing all these greek letters like delta and gamma. Arbitrage is about common sense, and if you rely on greek letters to support your decision, you will be disappointed.