Several major hedge funds are celebrating a massive payout following Chevron’s $53 billion acquisition of Hess Corporation. After a lengthy 20-month court battle, the deal finally closed, resulting in billions of dollars in profits for these firms.
Merger Arbitrage Pays Off
These funds used a strategy called merger arbitrage, which involves betting on the success or failure of mergers and acquisitions. They essentially placed bets that the Chevron-Hess deal would go through. According to Morgan Stanley, Hess stock was a hugely popular investment for these funds, with a collective $10 billion riding on the outcome.
Big Winners Announced
Among the big winners were some of the biggest names in the hedge fund world:
- Citadel Advisors: Ken Griffin’s firm reportedly held around $1 billion in Hess shares.
- Adage Capital: Also saw significant gains from their Hess investment.
- HBK Investments: Similar to Citadel, HBK held approximately $1 billion in Hess stock.
Westchester Capital, another participating firm, held a massive $350 million stake in Hess, representing their largest position in 15 years. Their co-chief investment officer expressed relief and satisfaction with the arbitration panel’s decision.
A Long Wait, Big Reward
The lengthy arbitration process clearly tested the patience of these investors, but the final result proved highly lucrative. The successful acquisition resulted in substantial profits for these hedge fund giants.