Alma DLD Convertible Arbitrage
Cumulative Performance (%)
Fund Inception 16 July 2021
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Strategy & Manager
DLD Asset Management LP (the “Investment Manager”) seeks to generate absolute returns by utilizing a spectrum of convertible arbitrage strategies, which are designed to profit from identifying mispriced or expected return differentials that exist between a convertible security and its underlying equity. These strategies are not designed to capture the returns of a rising market and conversely, being uncorrelated to the markets, are not expected to decline in value as the markets fall. The returns are realized as these positions move towards their fair valuation. The Investment Manager combines fundamental research and statistical screens to build a portfolio of primarily shorter-duration convertible securities, hedged using equities, options and other parts of the capital structure.
DLD Asset Management is a SEC registered investment advisor founded in July 2013 by Mark Friedman with 13 full time employees across strategies. DLD currently manages five distinct investment strategies: Non-Traditional Event-Driven, Classic Merger Arbitrage, Convertible Arbitrage, SPAC Trading and Equity Trading Strategies. The Firm and investors benefit from Mr. Friedman’s over twenty-nine years of trading and risk management experience, as well as all DLD professionals having extensive operating expertise in providing customized portfolio solutions.
Mark Friedman – Principal and Chief Investment Officer
Mark Friedman is recognized for his distinguished career of over twenty-nine years in the alternative investment industry. Mr. Friedman founded DLD Asset Management, LP, in May 2013, where he serves as Chief Investment Officer and Founder. Prior to launching DLD, Mr. Friedman briefly served as the Director of Trading and Operations at Touradji Capital Management. Before joining Touradji, Mr. Friedman co-founded AM Investment Partners, LLC, and co-ran the business from July 2001 through December 2011. AM was a multi-arbitrage strategy hedge fund operating in New York City and Hong Kong. Mr. Friedman’s primary role was to serve as Chief Investment Officer for all investment strategies. AM prided itself on slow and steady growth, providing outsized risk-adjusted returns and peaking in assets under management at just over $1 billion. Prior to co-founding AM, he served as Director and Head of Deutsche Bank’s US Convertible desk in New York City from September 1997 through July 2001. At Deutsche Bank, he was recognized for consistently maintaining the risks associated with a multi-billion-dollar convertible arbitrage portfolio. Mr. Friedman additionally served as Vice President with SBC Warburg in London trading South East Asian equity derivatives and convertibles. From May 1992 through August 1994, Mr. Friedman began his career as a Specialist and Market Maker trading US equity options on the American Stock Exchange for O’Connor and Associates. Mr. Friedman holds a Bachelor of Arts degree in Economics and International Business from New York University, Stern School of Business.
Statistics & Commentary
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Sector Breakdown as a % of AUM
as a % of AUM
as a % of AUM
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Trading Advisor's Commentaryas of
This month, we observed a strong rally in equities and credit following the November CPI number of 7.7% versus the survey’s 7.9% (6.3% vs. 6.5% ex-food and energy). Investor confidence that the Federal Reserve can control inflationary pressures and, as a result, slow the pace of upcoming rate increases seems prevalent. Although this may be true, inflation is still at 7.7%, with the Fed Funds rate at 3.83%. The High-Yield (HY) market rallied based on this news providing compelling opportunities in our Volatility Bucket as the relative value between HY pari passu bonds, and converts offer us relatively low implied volatility levels. A recent quote from Barclays stated that non-investment grade convertible bond spreads increased by 65 bps to 647 bps, while the Bloomberg US ‘HY’ B index spread decreased by 17 bps to 465 bps, creating a nearly 200 bp differential! We also see opportunities in our Synthetic Put bucket as long-only investors have taken advantage of the equity run-up and have begun selling.
November was the most active all year on the new issue front. The US market witnessed $3.6 billion of new paper bringing the year-to-date total to $24.4 billion. We are quite bullish on new issuance expectations for the new year. Driven by the need of corporates to refinance the plethora of debt raised during the 2020 pandemic and rates moving higher, many of these bonds are closer to becoming current. It’s starting to get quite expensive for corporates to issue debt in the HY market, and the convertible market offers the cost-effective alternative many are actively seeking out. We continue to proactively speak to many of our issuers about potential refinancing options and anticipate this being another positive contributor in 2023.
Facts & Documents
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 16 July 2021
Base Currency: USD
Depositary, Administrator, Transfert Agent: RBC Investor Services Bank S.A.
Dealing: Weekly with a 3-day notice
Cut-off time: 3 pm CET
Management Company: Alma Capital Investment Management
Investment Manager: DLD Asset Management
Countries where the fund is registered:
Luxembourg, Germany, Austria
The information related to the integration of sustainability risks and to the potential adverse sustainability impacts at the sub-fund level can be found in the prospectus of the Fund.
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