Schering Risk-Arb...

I am not a fan of the risk-arb guys.  There is so much money in the space that I don't think that any significant Alpha is generated by them.  In fact, I would suspect that well over half of their "alpha" could be easily replicated by a naive investment strategy.  If I ever start my own Fund of Funds, I will not even include any Risk-Arb or Convertible-Arb managers in the fund.  The costs of paying the managers, and doing the due diligence on the managers is greater than any value that they add.

This, however, is interesting.  In Germany, minority shareholders of more than 5% of a companies stock can seek an independent valuation in order for a takeover to go through.  This, of course, is something that a small naive investor could not do on his own:

http://snipurl.com/p31n