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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Virtus Westchester Credit Event Fund seeks discrete corporate events—such as mergers, asset sales, refinancings, and change-of-control provisions—that provide defined paths to repayment and value realization rather than relying on macroeconomic or interest rate forecasts. For the second quarter of 2026, the Fund returned 1.88% net of fees, outperforming major fixed income benchmarks, and achieved a year-to-date return of 1.35% net of fees. Performance was primarily driven by deal-specific developments, including bond price gains following asset sales at Conduent, short-duration yield and redemption optionality from SPAC holdings, and discount narrowing in municipal closed-end funds. Detractors were limited to situations experiencing extended timelines or maturity-extension uncertainties, such as Getty Images and DigitalBridge preferreds. The Fund maintains a constructive posture amid robust corporate transaction activity, supported by global announced first-half M&A reaching $2.8 trillion, while remaining insulated from broader duration and rate volatility.
Generating uncorrelated returns and capital preservation by investing across corporate balance sheets in discrete, catalyst-driven events such as mergers, asset monetizations, and refinancings with defined contractual protections.
The Fund anticipates that sustained large-scale M&A activity and impending corporate bond maturities will continue generating discrete credit-event opportunities. Management remains focused on idiosyncratic company actions—including asset sales, debt refinancings, and contractual covenant realizations—that offer defined repayment paths independent of broader interest rate cycles.
As of Jul 1, 2026
The fund is managed by a highly experienced three-person team with deep expertise in event-driven strategies. Roy D. Behren and Michael T. Shannon serve as Co-Presidents and Co-CIOs, bringing over 35 years of combined experience, while Steven V. Tan serves as Portfolio Manager. The team has been managing the fund since its inception in 2017 and operates under Westchester Capital Management, which has specialized in event-driven alternative investment strategies for over 40 years since 1989.
The Fund seeks to deliver consistent, positive absolute returns with low duration and credit risk by investing across several catalyst-driven credit strategies. Investment returns are driven by the outcome of dynamic, catalyst-focused corporate events rather than duration, credit quality, and/or the general direction of the broad fixed income market. The strategy focuses on credit events, late-stage distressed situations, and pre- and post-bankruptcy opportunities, serving as an alternative to traditional bond funds with flexible credit event strategies that provide attractive risk-adjusted returns independent of credit market cycles.
Lead Portfolio Manager
Roy D. Behren
Managing Partner
Moderate Conviction Bullish
Market Conviction
A score of 0.65 reflects a disciplined event-driven credit framework with top 10 positions representing 37.80% of net assets, alongside clearly identified catalyst theses for core credit names. However, the portfolio also maintains high diversification, allocating one-third of assets to aggregate SPAC positions and closed-end funds rather than single-name corporate credit concentration.
Growth Outlook
A score of 0.65 indicates constructive outlook driven by historical highs in first-half M&A deal value ($2.8 trillion), which generates significant transaction-related corporate credit volume. This is balanced by noted volatility stemming from interest rates, persistent inflation, and geopolitical headwinds.
Risk Appetite
A score of 0.55 reflects a balanced, catalyst-protected risk posture where one-third of the portfolio is anchored in short-duration, Treasury-backed SPAC trust structures. The remaining capital is committed to idiosyncratic credit workouts and corporate events that remain largely uncorrelated to broad credit spreads.
Capital Deployment
A score of 0.55 indicates steady, neutral-to-modest capital deployment as capital recycling occurs naturally upon the closing of announced transactions such as Frontier/Verizon and Earthstone/Permian Resources.
Forward Guidance
A score of 0.60 denotes steady ongoing capital deployment into discrete corporate actions, debt exchanges, and refinancings without taking directional interest rate bets. The manager continues monitoring pending liability-management transactions and announced mega-merger credit triggers.
Language Signal
Directional language balances positive commentary around record M&A flow, discount narrowing, and successful asset sales with prudent discussions of maturity uncertainty, bondholder negotiations, and delayed redemption timelines.
Perceived Risk
A score of 0.60 reflects active acknowledgment of macroeconomic headwinds, including persistent inflation, Federal Reserve interest rate uncertainty, and illiquid trading conditions for approaching debt maturities in lower-rated credits.
Opportunity Density
A score of 0.75 is supported by the manager highlighting the strongest first-half M&A environment since 1980, creating abundant balance-sheet opportunities across bond redemptions, refinancings, and asset monetization plays.
Time Horizon
A score of 0.35 captures an event-driven, short-to-medium-term time horizon where individual investment outcomes are governed by discrete transaction timelines, deal completions, and near-term debt maturity events occurring within 6 to 18 months.
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