KL Event Driven UCITS Fund

Investment rationale

KL Event Driven UCITS Fund is an open-ended UCITS fund designed to generate positive absolute risk-adjusted returns through a risk arbitrage strategy focused on transaction-related securities. With a summary risk indicator of 3 out of 7 and a recommended holding period of 3 years, it is intended for investors prepared to accept a medium-low level of risk of loss to original capital in pursuit of higher potential returns. It is designed to form part of a portfolio of investments, which makes it a distinct allocation rather than a broad market-tracking holding. Its focus on price differentials around takeovers, mergers and reorganisations gives it a specialised event-driven role.

2026-01-27

How the strategy works

The fund’s objective is to generate positive absolute risk-adjusted returns through a risk arbitrage investment strategy that seeks to capture the difference between the market price of securities and their anticipated value after completion or termination of a transaction. It invests in global equities and equity-related securities, including common stock and preferred stock of companies involved in takeovers, mergers and reorganisations, and may also use contracts-for-difference, options and forwards for investment purposes or to reduce currency risk on non-USD investments. The fund has no issuer, market or sector restrictions, but focuses primarily on European developed countries and North America, with limited potential exposure to Australia, New Zealand, Hong Kong, Japan, Malaysia, Singapore, Taiwan and Thailand; it generally invests in large and medium capitalisation companies, though it may invest across all market capitalisations including growth companies. It may invest up to 25% of net assets in fixed and/or floating corporate bonds, including convertible bonds, of any maturity and with ratings ranging from Aaa through to non-rated paper, and may not invest more than 10% of net assets in collective investment schemes. The fund is actively managed without reference to a benchmark, normally operates with average leverage of 100–200% of net asset value although higher levels are possible, reinvests income and capital gains rather than paying dividends, and has a recommended holding period of 3 years.

2026-01-27

Investment philosophy

• The fund follows a risk arbitrage strategy aimed at exploiting the price differential between a security’s market price and its anticipated value after the completion or termination of a corporate transaction.

• Investment opportunities are identified through a fundamental research process in which the Investment Manager evaluates a transaction’s likely completion, the securities’ anticipated value and the expected timeframe for the transaction.

• The investable universe is broad, with no restrictions on issuers, markets or sectors, although the portfolio focuses primarily on developed Europe and North America and may have limited exposure to selected Asia-Pacific markets.

• The portfolio is built mainly from global equities and equity-related securities of companies involved in takeovers, mergers and reorganisations, with additional use of CFDs, options and forwards for investment purposes and currency risk reduction.

• Portfolio limits and risk controls include a maximum 25% allocation to fixed and/or floating corporate bonds, including convertible bonds, a maximum 10% allocation to collective investment schemes, and average leverage normally in the 100–200% range of net asset value.

2026-01-27

Distinctive features

The fund is differentiated by its specialist event-driven risk arbitrage approach, targeting securities affected by takeovers, mergers and reorganisations rather than following a broad market or benchmark-driven allocation. It is actively managed without reference to any benchmark, so portfolio construction is not constrained by index constituents. The mandate is flexible across issuers, sectors and markets, while still maintaining a stated primary focus on developed Europe and North America. It also offers weekly dealing on Thursdays and a no-dividend accumulation structure that reinvests income and capital gains.

2026-01-27

Risks

The summary risk indicator is 3 out of 7, indicating a medium-low risk class, with potential losses from future performance rated at a medium-low level. The fund is exposed to market risk because returns depend on future market performance and on the pricing of securities linked to corporate transactions. Investors may receive payments in a different currency, and the final return may therefore depend on exchange rates; this risk is not included in the summary risk indicator. Structural sources of risk also include the use of CFDs, options and forwards, investment in corporate bonds including non-rated paper, and leverage that normally averages 100–200% of net asset value, although higher levels are possible. In the worst case, investors could lose their entire investment.

2026-01-27

Asset manager

The PRIIP manufacturer and management company is Waystone Management Company (IE) Limited, which is authorised in Ireland and supervised by the Central Bank of Ireland. The fund is authorised in Ireland and regulated by the Central Bank of Ireland. Further fund information is provided through www.kitelake.com.

2026-01-27