By Basil Williams
After more than a decade of competing directly with prop trading desks at large banks, hedge funds willing to take on the associated risks of arbitrage trading have reclaimed significant market share. At the heart of the opportunity set for relative value strategies are three important ingredients in evidence now that I expect will prevail for an extended period: volatility of spreads resulting from the interplay of financial and economic factors; structural imbalances owing to such factors as increased regulation, the increased...
