| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.1% | 1.3% | 14.8% |
| 2025 | 2024 | 2023 |
|---|---|---|
| 14.8% | -3.9% | 7.6% |
VH Standard Merger Arb Fund delivered strong performance in 2025 with a 14.79% net return, following a challenging 2024. The fund has generated a 7.09% annualized return since inception in July 2023, demonstrating the ability to compound capital through merger arbitrage strategies. Manager Bob von Hoffmann identifies a meaningful shift in the merger arbitrage landscape, with spreads becoming less efficient as capital left the space during years of aggressive regulation. The regulatory pendulum has swung toward being more favorable for M&A activity, creating opportunities for nimble managers. The fund is adapting its approach to place greater emphasis on transformational deals and financing risk analysis, moving beyond purely regulatory focus. Key macro catalysts include AI transformation, onshoring driven by tariffs, and improving economic conditions with declining interest rates and solid GDP growth. The manager maintains a disciplined approach with 99% long exposure across 44 deals, focusing on capital preservation while generating absolute returns through successful transaction completions.
VH Standard capitalizes on inefficient merger arbitrage spreads in a changing regulatory and economic environment by emphasizing transformational deals and financing risk analysis while maintaining disciplined risk management through diversification.
The manager expects the merger arbitrage landscape to continue evolving with less efficient spreads creating opportunities. Focus is shifting toward transformational deals and financing risk analysis as tectonic economic shifts create both opportunity and risk. The regulatory environment has become more favorable for M&A activity.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 20 2026 | 2025 Q4 | EA, EXAS, JAMF, KVUE, NSC, QRVO, SGOV, WBD | AI, Capital markets, Deregulation, M&A, Merger Arbitrage, Onshoring, Regulatory, Spreads | - | The merger arbitrage landscape has shifted meaningfully with spreads becoming less efficient due to capital leaving the space during tough regulatory years. The pendulum for regulators has swung toward being more favorable for M&A activity, creating opportunities for those positioned to take advantage. Tariffs and the current U.S. administration's goals are creating a monumental shift in the global economy. Onshoring and supply chain re-optimization will create new winners and losers as companies adapt to changing trade dynamics. AI is viewed as the biggest catalyst to be let loose into economies, creating a sea of change. This technological shift is expected to drive significant transformation across industries and create new investment opportunities. |
| Nov 13 2025 | 2025 Q3 | - | arbitrage, deals, Mergers, risk, Spreads | - | The fund highlights a strong M&A environment supported by deregulation, stable deal flow, and robust arbitrage spreads. A disciplined, insurance-like approach to risk and diversification drove steady book value growth and consistent realized gains. The strategy continues to capitalize on a buoyant merger market with favorable conditions for absolute-return arbitrage. |
| Sep 3 2025 | 2025 Q2 | - | Balance Sheets, cash flow, Compounding, Discipline, Quality | - | The letter emphasizes disciplined investment in high-quality businesses with strong balance sheets, resilient cash flows, and management teams focused on long-term value creation. Management argues that market volatility and short-term sentiment have created mispricings in fundamentally sound companies. A patient approach centered on downside protection and compounding is positioned as the core driver of attractive long-term returns. |
| May 17 2025 | 2025 Q1 | - | - | - | |
| Jan 27 2025 | 2024 Q4 | ACI, CPRI | - | - | |
| Oct 31 2024 | 2024 Q3 | CPRI, ESGR, MGRC | - | - | |
| Aug 2 2024 | 2024 Q2 | - | - | - | |
| May 8 2024 | 2024 Q1 | - | - | - | |
| Jan 23 2024 | 2023 Q4 | - | - | - | |
| Oct 7 2023 | 2023 Q3 | - | - | - | |
| Aug 15 2023 | 2023 Q2 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Capital MarketsExchanges operate as essential high-margin toll roads for the economy with immense operating leverage. They benefit from trading volume flowing directly to profits with minimal extra cost and have natural inflation hedging through transaction values. |
Exchanges Nasdaq CBOE Trading Fees Market Data | |
OnshoringReshoring of supply chains presents compelling opportunities for smaller companies. AZZ is positioned to benefit from domestic manufacturing reshoring trends, while the broader strategy targets companies that can capitalize on this shift. |
Reshoring Supply Chains Manufacturing | |
| 2025 Q3 |
M&A |
|
| 2025 Q2 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| EA | We sold our position in Electronic Arts in the Communication Services sector. Electronic Arts did well in 2025, advancing approximately 40% for the year. In late September, the company announced an agreement to be acquired by Saudi Arabia's Public Investment Fund, Silver Lake, and Affinity Partners for $55 billion. The Fund often benefits from takeovers, as the companies we hold tend to be attractively priced, solid businesses that are undervalued, as was the case with Electronic Arts. |
| EXAS | The largest single contributor was Exact Sciences, which was acquired for a significant premium by Abbot Laboratories in November, resulting in an +86% return in the quarter for one of our higher-conviction positions. |
| KVUE | Kimberly-Clark's $49 billion acquisition of Kenvue. |
| NSC | Norfolk Southern merger with Union Pacific would create the first transcontinental rail network in the United States. We believe this provides a credible pathway to renewed volume growth and further productivity gains in an otherwise mature industry. |
| QRVO | We believe Skyworks' merger with Qorvo will be a long-term positive, and we see room for rising demand from both industrial and mobile applications. |
| SGOV | Includes positions in treasuries, cash equivalents, and a long position in iShares 0-3 Month Treasury Bond ETF (Symbol: SGOV), which may be a substantial part of the portfolio at any given time. |
| WBD | Warner Bros Discovery (WBD) was the top contributor during the quarter. The U.S.-headquartered media company's stock price surged as multiple parties submitted offers to acquire all or part of the business. Following several rounds of bidding, WBD announced an agreement to sell its Streaming and Studios business to Netflix, while spinning the Global Networks business to shareholders. Paramount Skydance subsequently made a direct $30 per share offer to shareholders for the entire company. We are pleased with the steps the WBD board has taken thus far to unlock shareholder value. We will continue to closely monitor developments as this bidding war unfolds. |
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