I was Youtubing a session of the CNBC Delivering Alpha conference where they interviewed hedge fund manager John Paulson. I’ve seen lots of videos of this conference but this was the first I’ve watching this particular interview, and what fascinated me upon further research was that John Paulson’s hedge fund specializes in a type of investing known as “event-driven investing”.
Now I’ve never claimed myself to be knowledgeable about the financial services industry by any means, so being that this was the first time I’ve ever heard of the term “event-driven investing”, I was naturally intrigued at how this ties into the world I know. As it turns out, my curiosity led to even more inspiration than I expected.
When we use the term “corporate events” in the events industry, it refers to a niche of event productions distinct from the likes of “social events” or “special events” or “entertainment events” etc. Corporate events refer to conferences, to meetings, to trade shows and exhibitions, to incentive tourism, product launches, and promotional tours. Different industries utilize different combinations of these types of corporate events and for different purposes, but as far as the events industry is concerned, this has been the extent of our thinking whenever we hear the term “corporate events”.
Which is why I was so intrigued to learn that “corporate events” has such a radically different association in the financial services industry. When an investor refers to a fund having an “event-driven” strategy, the “events” he refers to are those that impact the operations of the company in the biggest, most macro level of ways. We’re talking about a merger, an acquisition, an IPO, a bankruptcy, a spinoff, or some other type of such event where all the company’s stakeholders are impacted. Event-driven investors play arbitrage to these situations, relying on a combination of access to information and analytical intuition to make trades and deals for profit in these situations.
It isn’t even that I find this type of investing to be intriguing; rather I find it so intriguing that the word “events” is one that can take on so many different meanings. I’ve said over the years that the reason why I got into the events industry in the first place was I found the elusiveness of its concept so intriguing. Many of our explorations have been me trying to come to terms with defining what an “event” really is. Seeing as I just did that one industry can define “corporate events” with one set of parameters and another industry can define that same term with a set of parameters that have zero overlap with the other, just goes to underscore my thesis that the notion and concept of events is one elusive enough that the opportunities in this industry are endless.
Can the same set of principles we use to plan an events-industry-defined-corporate-event be used to plan a finance-industry-corporate-event? Is there some version of having a vision, organizing an execution strategy, creating a timeline, getting a team together, and bringing people together to see a plan coming to fruition be applied towards making a hundred billion dollar M&A deal happen? I’ll be keeping that notion in mind…
See you at the next exploration!