Dime after Dime, Time after Time: Steve Gerbel, the expert behind the SilverPepper Merger Arbitrage Fund.


SilverPepper Merger Arbitrage Fund.

The mergers we avoid are more important than the mergers we invest in

The distinguishing characteristics of the SilverPepper Merger Arbitrage Fund:

  • Steve Gerbel is an expert in merger arbitrage. Indeed, Chicago Capital Management, LLC, the firm that he founded in 1997, is a specialist in merger-arbitrage investing. Merger arbitrage has been his life’s focus for the past 20 years.
  • Battle-tested track record of skillfully managing a substantially similar privately-offered, merger arbitrage hedge fund.  Click here to view the related performance, risk and correlation data of the private fund in our Prospectus.
  • Disciplined and intensive research process that combines multiple research sources, often looking for off-the-beaten-path resources that can inform their view on the probability of mergers being completed at the right price, and at the right time.
  • Picky:  We don’t invest in every deal. Instead, we scour the landscape for those mergers that have a high probability of closing, and closing on time.
  • Appetite for smaller-capitalization companies, where regulatory and anti-trust hurdles are lower, yet where spreads may be wider because of less competition.
  • Opportunistic use of leverage to grow economic exposure to merger investments. Leverage cuts both ways, however, magnifying both gains and losses.
  • Cut positions quickly if questions arise about the successful completion of a merger, because when the bride is left at the altar, it makes for a bad event.

Dime after dime.  Time after time.

Short Film:  When the bride is left at the altar, it makes for a bad event.  Understanding Merger Arbitrage.


Same stocks, different technique.

Merger arbitrage is an event-driven strategy

Key takeaways about merger arbitrage as an investment strategy:

  • Merger arbitrage is a fundamentally different investment strategy whose risk and returns are not dependent on the direction of the stock market.
  • Merger arbitrage primarily has “event” risk, which revolves around the successful or unsuccessful completion of an announced merger or acquisition.
  • Event risk so dominates the price of the stock of a company involved in a merger, that merger arbitrage investing has low beta (market risk) and low correlation (it tends to zig when the market zags) to the stock market.
  • It should be intuitive that buying shares of a stock that is scheduled to be acquired at a specified price, within a specified period of time, creates a markedly different risk and return profile than traditional “buy low and sell high” stock-investing, in which the future price is unknown.
  • Historically, merger arbitrage has lower risk, or volatility than traditional stock investing (the volatility is, historically, more in line with medium duration bonds.)  Accordingly, investors should also expect lower returns.
  • Event risk is real.  If a merger doesn’t close as expected, the Fund could lose money.  The risk is manageable, but SilverPepper investors need to be aware of the risk and be prepared for it.  Be a smart investor!  View the Fund’s Principal Risks here.
  • Hence, expert managers who have a healthy respect for risk is imperative.
  • Low correlation strategies, like merger arbitrage, can play a critical role in improving the diversification of an investor’s portfolio.

Comprehensive Fund Presentation: Learn More. Be Smart.



Repository of insights.

Our hedge fund experts speak their minds

Candid observations of markets and current portfolio positioning from the manager of the SilverPepper Merger Arbitrage Fund.

Manager Commentary: 4Q 2022

4Q 2017 Merger Arbitrage

Manager Commentary: 2Q 2023

2Q 2017 Merger Arbitrage

Data for your brain.

Interactive fact sheet and performance

Merger Arbitrage Fact Sheet

Returns as of 06.30.2023
YTD1-Yr3-Yr5-YrSince Inception
Institutional class - SPAIX4.23%5.72%4.23%2.22%2.98%
Advisor class - SPABX4.06%5.49%3.97%1.96%2.73%
S&P 500 Index13.07%21.62%10.15%9.92%11.51%
Correlation to Broad Market Indexes
Since Inception
Bloomberg U.S. Aggregate Bond Index 0.12
S&P 500 Index 0.39
Standard Deviation
Since Inception
SilverPepper Merger Arbitrage I3.46%
S&P 500 Index14.98%

Monthly Returns, Institutional Class

2017-0.18%0.00%0.36%0.36% 0.18%0.54%-0.54%0.36% 0.09%0.00%0.00%0.57%1.76%
20150.60%0.99%0.10%0.29%0.78%0.10%0.48%0.77%0.19%2.47%0.19%1.25% 8.49%
2014-0.10%0.10%0.10%-1.48%1.40%0.69%0.79%0.68%-0.77%-0.10%1.37%-0.23% 2.44%


The returns represent past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Call 855-554-5540 for current month-end performance.

Total annual fund operating expenses are 6.08% gross, 4.50% net for the Institutional class and 6.28% gross, 4.75% net for the Advisor class. The Advisor has contractually agreed to waive its fees and/or pay for expenses to ensure that total fund operating expenses (excluding, as applicable taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with Form N-1A), incurred in connection with any merger or reorganization, or any extraordinary expenses such as litigation expenses) do not exceed 1.75% for the Institutional class and 2.00% for the Advisor class. This agreement is in effect until October 31, 2032.

Inception dates for both share classes is October 31, 2013. Performance and risk measures greater than one year are annualized. Correlation and standard deviation figures are since the Fund’s inception and for the Institutional class shares.

Correlation is a statistical measure of how two securities move in relation to each other, ranging from -1 to +1. A correlation of 0 means the relationship between the two securities is completely random, while +1 indicates a perfect positive relationship and -1 a perfect negative relationship.

Standard Deviation is a term used to indicate and quantify risk. Specifically, standard deviation indicates the volatility of a fund’s total returns. In general, the higher the standard deviation, the greater the volatility of return. If a fund had a mean (average return) of 10%, and a standard deviation of 2%, you would expect the fund’s returns to fall within 12% and 8%, 68% of the time. And 95% of the time, you would expect its returns to fall within 6% and 14%.