BlackRock Event Driven Equity Fund to reopen to new investors (tentatively)

TheShadow

http://www.sec.gov/Archives/edgar/data/1097077/000089109215004190/e64194_497.htm

497 1 e64194_497.htm SUPPLEMENT
BlackRock Event Driven Equity Fund

Supplement dated May 13, 2015 to the Summary Prospectus, Prospectus and Statement of Additional Information of BlackRock Event Driven Equity Fund (the “Fund”), dated May 8, 2015

The Fund is currently closed to new investors. On or about July 27, 2015, the Fund expects to re-open to new investors.


Shareholders should retain this Supplement for future reference.


PRSAI-EDE-0515SUP

VintageFreak

So i was looking into Event Driven funds. This one is available No Load at Schwab. Any insight into it. I just started thread on FARNX separately.

What's so special about "Event driven"? I mean lots of people in their prospectus say they look for "events" happening to securities, but don't necessarily use it in the name. Unless they thing "Alternative" in the name is equally generic and do a coin toss, which one to use.

David_Snowball

"Event-driven" tends to be code for "market neutral, we hope." In general the plan is to try to pick up a bunch of small gains from arbitrage, which you can pocket even when the market's falling. One example: if Company A is expected to buy Company B, in about 90% of the time A's stock will fall upon the announcement and B's will rise. So you short A and go long on B, hold the positions for a few days or weeks and close them out with a market-neutral gain of 3%. If the market falls while you're holding these positions, your bet is that your short position will fall more than your long position will, so you'll make a big gain on the short, a smaller loss on the long, and you'll still pocket 3%.

The BlackRock fund is tiny and sucky. They just brought in a new manager, Mark McKenna. McKenna's previous employer was Harvard Management Company, the guys who manage the endowment. HMC was having a house-cleaning after years of unacceptable returns. BlackRock hired McKenna to manage an event-driven hedge fund for them then switched him here to try to stanch the bleeding.

For what that's worth,

David

JohnChisum

Is there any purpose of having this kind of fund in your portfolio? It is a very niche type of fund.

scott

JohnChisum said:

Is there any purpose of having this kind of fund in your portfolio? It is a very niche type of fund.

I suppose it's sort of a bond alternative in the regards that you hope it'll hit singles in good times and bad and possibly a double on a really good year. Aside from that, no. Fidelity's newer Event Driven fund has gotten some interest, but I think that one also is more flexible and pushes the usual boundaries of an event driven fund.

Still, I like alternatives but have no interest in this strategy. If you think there is going to be a sustained move lower in the market (not saying that I do), then I'd rather managed futures in terms of alternatives as something that would potentially do better in a sustained downturn.

TheShadow

I have Quaker's Event Arbitrage Fund from when it was Pennsylvania Avenue Event Driven Fund. When Quaker acquired the fund, they instituted a load; however, I was grandfathered from paying the load on "A" shares since I was an original Penn Ave Event Driven fund investor.

msf

FWIW, the Quaker A shares (QEAAX) are available NTF from Schwab, and the institutional shares (QEAIX) appear to be available at a normal $2500 min in Fidelity IRA accounts (only), albeit with transaction fees.

TheShadow

@msf

You can buy QEAIX at Scottrade for very low minimums ($100.00). I bought the minimum of QEAIX besides having the "grandfathered no-load" A shares through Quaker. Ironically, none of the Quaker CSRs knew about the grandfathering provision when I called them some time ago. I had to demonstrate that I was an actual Penn Ave Event Driven shareholder as well as the page in the prospectus indicating the grandfathering provision.