Following the desperate situation in March, by the last quarter of 2020 we found ourselves almost in a state of exuberance. The year will be remembered for the markets’ quick and spectacular turnaround. Once it was confirmed that the COVID-19 pandemic was spreading with virulence in Europe and America, the financial markets were left ravaged at the beginning of the year and many managers lost their bearings. The rout continued until it became clear that governments and central banks could organize a rescue that would at least be temporary, and that science, with stunning efficiency, could provide the glimmer of hope we so desperately needed.
The Amethyst Arbitrage Fund had the necessary tools to get through this period: experience, ingenuity and caution. The widespread downturn in March wiped out our performance in the first quarter. But the measures we took immediately in its wake to mitigate the risk by focusing the portfolio on higher conviction opportunities, as well as the caution exercised as we executed our arbitrage strategies, put us in an enviable position to take advantage of a year-end full of solid opportunities. After we had recovered from the shock of the pandemic, in the spring we set ourselves an objective of making up for the losses incurred in the first quarter and ending the year with a positive return. Today, we can say that this mission was accomplished.