Catalyst Event Arbitrage Fund eyes firms subject to corporate events

By Toni Weeks

San Diego, Feb. 21 - Catalyst Funds said it is planning a new fund that will focus on corporate events, such as mergers, acquisitions, restructurings, spin-offs recapitalizations and other special situation investments.

According to an N-1A filing with the Securities and Exchange Commission, the Catalyst Event Arbitrage Fund will seek long-term capital appreciation with low volatility and low correlation to the equity market. It will use event arbitrage to purchase securities of companies that are the subject of cash tender offers, cash mergers, stock mergers, acquisitions attempts, exchange offers or other forms of corporate reorganizations of restructurings, such as liquidations, proxy contests, spin-offs or bankruptcy reorganizations.

Event arbitrage is designed to profit from the successful completion of such transactions. The investments will consist primarily of long and short equity positions and call and put options.

Paul Rosenberg is the portfolio manager.

The fund will launch with class A and class C shares, both of which will impose a 1% maximum deferred sales charge. Class A shares will also carry a 5.75% maximum sales charge.

Both share classes will incur 1.25% management fees. Along with other fees and expenses and a fee waiver agreement with the adviser, total annual fund operating expenses are expected to be 1.75% and 2.5% for class A and class C shares, respectively.

Ticker symbols have not yet been set.

Lloyd Harbor, N.Y.-based Catalyst Capital Advisors LLC will serve as the investment adviser.

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