Browse CFA Level 1

Chapter 10: Special Situations and Event-Driven Strategies

In this section

  • Distressed Investing and Restructuring Opportunities
    Explore the complete lifecycle of distressed investing—from early warning signals to advanced restructuring strategies—plus legal frameworks, ESG considerations, and modeling approaches.
  • Merger Arbitrage, Spin-Offs, and Divestitures
    Explore how merger arbitrage strategies capture pricing inefficiencies in M&A deals, the mechanics of spin-offs and divestitures, and critical contractual clauses that shape event-driven investment opportunities.
  • Capital Structure Arbitrage and Litigation Finance
    Explore how investors use capital structure arbitrage to profit from mispricings across debt and equity layers, and discover how litigation finance offers a unique, uncorrelated return stream by funding legal claims in exchange for a share of potential awards.
  • Risks, Returns, and Portfolio Considerations
    Explore how special situations and event-driven strategies fit into a portfolio, focusing on risk types, liquidity, leverage challenges, and key due diligence considerations.
  • Post-Bankruptcy Equities and Turnarounds
    Dive deep into post-bankruptcy equities and explore the nuances of turnaround strategies, capital structure revitalization, and critical due diligence steps for newly reorganized companies.
  • Asset-Based Lending and Collateral Coverage
    A comprehensive guide to Asset-Based Lending and Collateral Coverage, exploring ABL fundamentals, risk factors, and strategies for managing collateral in special situations.
  • Activist Investing in Special Situations
    Explore how activist investors influence corporate strategy and governance to unlock shareholder value, including tactics, risks, and best practices for successful engagements.
  • Regulatory Timelines and Transactional Complexities
    Explore the intricacies of regulatory approvals, bridging strategies, and stakeholder communication in event-driven and special situation deals.
  • Liquidations and Receiverships
    Explore how liquidations and receiverships function in event-driven strategies, focusing on voluntary vs. involuntary liquidations, court-appointed trustees, hierarchical payouts, and opportunities for investors seeking distressed assets.
  • Secondary Market for Trade Claims
    Explore how trade claims owed by bankrupt companies can be sold in a dynamic secondary market, allowing suppliers rapid liquidity while offering specialized investors unique opportunities.
  • Leveraged Recapitalizations and PIK Structures
    Explore the strategic rationale, mechanics, and risks behind Leveraged Recapitalizations and Payment-in-Kind Debt, including real-world examples and best practices for CFA candidates and finance professionals.
  • Shareholder Activism Tactics and Outcomes
    Shareholder activism strategies—constructive or adversarial—can reshape corporate policies, board structures, and valuation outcomes. Explore tactics, best practices, global considerations, pitfalls, and real-world examples.
  • Hostile Takeovers and Proxy Contests
    Explore the sequence, defensive measures, and dynamics behind hostile takeovers and proxy contests, including real-world examples, strategic considerations, and stakeholder impacts.
  • Cross-Border M&A and Currency Risks
    Explore the complexities of cross-border M&A, from legal and political challenges to exchange rate hedging strategies and cultural integration best practices.
  • Splits, Reverse Splits, and Special Dividends
    A comprehensive exploration of stock splits, reverse splits, and special dividends within event-driven strategies, including their mechanics, rationales, tax considerations, and implications for portfolio management.
  • Legal and Compliance Issues in Event-Driven Deals
    Explore essential legal and compliance considerations in event-driven transactions, covering insider trading regulations, NDAs, fairness opinions, cross-border frameworks, litigation risks, and best practices for professionals in alternative investments.
Wednesday, April 9, 2025 Monday, January 1, 1

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