Bear Stearns Introduces the Bear Stearns Risk Arbitrage Cash Deal Index—A New Way to Participate in Risk Arbitrage
September 12, 2007 // Franchising.com // New York, New York — Bear, Stearns & Co. Inc. today announced that it recently launched The Bear Stearns Risk Arbitrage Cash Deal Index (Bloomberg: BSEICASH <Index>)—a new way to gain exposure to risk arbitrage deals in the US. The index, created by the Bear Stearns Equity Linked Strategy Team, is composed primarily of the largest US companies by market capitalization that are the targets of definitive, pending all-cash acquisitions.
"This index is for investors who would like to use risk arbitrage strategies in their portfolios," said Justin Lubell, trading strategist on the Equity Linked Strategy team. "Investors can use the index to gain broad-based, directional exposure to a portfolio of companies that are the targets of definitive deals."
The Bear Stearns Risk Arbitrage Cash Deal Index is a modified market-capitalization weighted index. To be eligible for inclusion in the index, US companies must have a market capitalization of at least $300 million and meet certain other quantitative criteria. The index is rebalanced weekly to account for changes in the universe of pending deals and to ensure that constituents continue to meet the criteria for inclusion.
This risk arbitrage index is the latest addition to the growing suite of Bear Stearns Equity Indices (Bloomberg: BSEI <Go>). Previously launched indices include the Bear Stearns Trucking Index and Bear Stearns Railroad Index in the US, the Bear Stearns Alternative Energy Index in Europe, and the Bear Stearns Indian Banks Index and Bear Stearns Japanese REIT Index in Asia.
"Our custom index derivatives business is growing globally as investors look for new and innovative strategies," said James Chen, Head of Global Portfolio and Index Trading. "We can work with clients to design and create custom baskets of securities and plan on building our suite of indices even further."
About Bear Stearns:
Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The Company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. Headquartered in New York City, the company has approximately 15,000 employees worldwide. For additional information about Bear Stearns, please visit the firm's web site at www.bearstearns.com.
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