SPABX — SilverPepper Merger Arbitrage Fund
Data updated: 2023-11-29
SPABX — SilverPepper Merger Arbitrage Fund. Commodity · $16.51M AUM · 4.75% expense ratio · 5.5% 1-yr return. Holdings, fees, performance and SEC filings.
SPABX Fund Overview
SPABX — SilverPepper Merger Arbitrage Fund is a US mutual fund managed by Investment Managers Series Trust, categorised as Commodity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.
- Type: US mutual fund
- Manager: Investment Managers Series Trust
- Category: Commodity
- Assets under management: $16.51M
- 1-year return: 5.5%
- Ticker: SPABX
- SEC CIK: 0001318342
- SEC series ID: S000041406
- Share class ID: C000128408
SPABX Investment Objective and Strategy
SilverPepper Merger Arbitrage Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Investment Managers Series Trust.
Investment objective
"The primary investment objective of the SilverPepper Merger Arbitrage Fund (the ""Merger Arbitrage Fund"") is to seek returns that are largely uncorrelated with the returns of the general stock market. The Merger Arbitrage Fund also seeks capital appreciation."
Principal investment strategy
"Merger arbitrage is an investment strategy that specializes in buying the publicly-traded common or preferred stock of a company that is involved in a significant corporate event, such as a merger or acquisition. Investments in companies that are involved in these life-changing events have both risk and return characteristics that are markedly different from investing in the stock market in general. Under normal market conditions, the Merger Arbitrage Fund will primarily invest using merger arbitrage strategies. Traditional stock investing, and its risks and returns, are tied not only to company-specific factors such as profitability and prospects for growth, but also to broader economic factors such as interest rates, inflation, global trade and political risks. In contrast, both the risk and return of merger-arbitrage investing are largely isolated from the daily gyrations of the stock market, and instead are dependent on the successful or unsuccessful completion of a merger or acquisition.
As a function of its investment strategy, merger-arbitrage investing creates returns that are largely uncorrelated with, or independent of, the returns of the stock market. The typical merger-arbitrage strategy seeks to generate a return by purchasing the stock of the company being acquired, which is commonly known as the target company (the ""target""), and when appropriate, shorting the stock of the acquiring company. The purpose of the strategy is to profit by earning the ""spread,"" or difference in price, between: 1. The current trading price of the target company following the announcement of the merger, and 2. The contractual price to be paid for the target company in the future when the transaction closes. This spread, or the return that can be earned, is usually relatively narrowoffering a modest nominal total return.
However, since a merger transaction generally is completed in three to four months, this modest return translates into higher annualized returns. Every merger transaction has a unique set of risks and deal terms. Since the risks of each transaction, not the general movement of the stock market, drive the returns and risks of the Merger Arbitrage Fund, assessing the risks of each merger event is critical. Chicago Capital Management, LLC (""Chicago Capital"" or the ""Sub-Advisor"") is the Sub-Advisor for the Merger Arbitrage Fund and is responsible for the day-to-day management of the Fund. Chicago Capital specializes in merger-arbitrage investing and has significant experience and expertise in assessing the risk and return tradeoff of investing in companies involved in a publicly announced merger.
After the announcement of a merger, Chicago Capital explores the opportunity of investing in the transaction. If Chicago Capital believes the merger is attractive and meets Chicago Capital's guidelines, the Merger Arbitrage Fund will initiate an opening position in the transaction. The Sub-Advisor has the ability to invest in a wide array of event-driven transactions, but will primarily invest in mergers or acquisitions that are initiated and announced by well-financed companies that are also strategic acquirers. Chicago Capital believes transactions with these characteristics provide the best risk-adjusted returns. Chicago Capital continuously monitors a pending transaction for all the elements of potential risk, including regulatory-approval risk, changes in deal terms, financing and shareholder approval.
Chicago Capital may actively buy or sell merger investments based on their assessment of the merger's risks and profit opportunity. The Merger Arbitrage Fund is not limited by market capitalization or industry. It will invest across industries, sectors and geographies, although it will invest predominantly in companies located in the United States and Canada. Although the Fund may invest in transactions across industries and sectors, it may, from time to time, focus its investments in one or more industries or sectors. The Fund may engage in frequent and active trading. In executing the Merger Arbitrage Fund's strategy, Chicago Capital generally expects to employ leverage and to use a variety of hedging techniques including those involving short sales and less frequently, options. Under normal circumstances, the Fund invests primarily in equity securities of U.S.
and Canadian issuers, which may include American Depository Receipts (""ADRs""). ADRs are receipts that represent interests in foreign securities held on deposit by U.S. banks. The Merger Arbitrage Fund is ""non-diversified"" under the 1940 Act, which means that it may invest more of its assets in fewer issuers than a ""diversified"" mutual fund."
SPABX Performance
Total returns for SPABX (as of 2026-10-01), from SEC filings.
| Period | Total return |
|---|---|
| 1 year | 5.5% |
| 3 years (annualised) | 4.0% |
SPABX Risk Information
Risk metrics for SPABX, derived from monthly returns in SEC filings.
- 1-year volatility (annualised): 2.5%
SPABX Costs and Fees
SPABX costs about $475 per $10,000 invested per year in fund expenses.
- Net expense ratio: 4.75%
- Gross expense ratio: 6.28%
- Portfolio turnover: 291%
- Brokerage commissions: 5.58 bps of average net assets (SEC N-CEN)
SPABX Cashflows
Over the 12 months to 2023-09, SilverPepper Merger Arbitrage Fund had net inflows of $9.09M, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2023-09 | $1.24M |
| 2023-08 | $82.98K |
| 2023-07 | $347.19K |
| 2023-06 | $283.62K |
| 2023-05 | $1.59M |
| 2023-04 | $474.39K |
SPABX Debt Constituents
No individual debt constituents are reported in SilverPepper Merger Arbitrage Fund's latest SEC N-PORT filing.
SPABX Prospectus and SEC Filings
Official SilverPepper Merger Arbitrage Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.
- Prospectus (485BPOS) — filed 2021-10-26
- Prospectus (485BPOS) — filed 2020-10-26
- Prospectus supplement (497) — filed 2022-11-04
- Portfolio holdings (N-PORT) — filed 2023-11-29
- Portfolio holdings (N-PORT) — filed 2023-08-28
- Portfolio holdings (N-PORT) — filed 2023-05-30
- Annual census (N-CEN) — filed 2023-09-12
- Annual census (N-CEN) — filed 2022-09-13
Related Funds
Other Commodity funds tracked on ABC INVEST:
Data Sources
ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.