Tycho Athos Event Driven Fund

Overview

Tycho Athos Event Driven Fund is an equity biased, event driven fund with a primary focus on short dated and liquid hard catalyst events in the Asia Pacific region and beyond. Athos Capital Limited was founded by Matthew Moskey and Fred Schulte Hillen, two seasoned event driven investors.

Strategy & Manager

Performance

Commentary

Investment Manager’s Commentary – September 2026

September was an unusual month for our strategy, with several large positions driving negative performance in unrealized positions, primarily around relative value and A/H spreads, while our merger arbitrage and other portfolios largely had a quiet month with less positive contribution than we would typically expect. We expect much of this performance to revert given the nature of the exposure, in some instances with incremental performance given additional exposure that we built into the portfolio at attractive levels during the month, while otherwise increasing exposure to a number of new merger arbitrage spreads as well as high conviction ECM positions. More generally, increases to the risk-free rate as well as moments of equity market pressure continue to drive a broadly wider spread environment across several of our core arbitrage strategies which, while complicated in the third quarter given a fully invested portfolio, continue to provide a significant return opportunity for the Fund.

Positive contributors in September included several earlier stage merger arbitrage positions, as well as an event position related to a relisting of a Hong Kong-listed company to the United States. Negative performance was concentrated towards two A/H spreads that saw material widening over the month, as well as widening in a holding company spread that remains a top performer for the year and where we are increasing exposure.

Strategy Review and Outlook:

During the quarter, a subset of A/H spreads have increasingly been trading with less correlation to the overall A/H spread universe. We believe that this is primarily a function of the quality of the companies involved, which in the battery and healthcare space for example, have rapidly developed into significant international market leaders and have therefore become increasingly permanent parts of international portfolios, leading to differences in the behaviour of the H Share relative to historical patterns. Outside of certain individual A/H names, the broader A/H trading strategies had broadly positive performance over the quarter as spreads remained choppy and mostly tight.

In our core merger arbitrage strategy, performance in Q3 was driven by several M&A situations across different regions. A key contributor was our material position in a consolidation transaction in the brokerage sector as well as a landmark media merger, both of which successfully closed during the quarter. As we approach the final quarter of the year, we remain constructive on the opportunity set and expect to have multiple avenues to deploy capital across the region, particularly in Australia and Japan, where activity remains elevated. Beyond newly announced transactions, we expect opportunities to deploy capital into existing deals where volatility, regulatory uncertainty, or changes in transaction terms create attractive entry points and improved risk-adjusted returns.

We continue to trade actively around a core set of relative value and non-fungible share class arbitrage opportunities, with a particular focus on core positions around Prosus / Tencent and the TSMC share class spread. These positions have been significant contributors to performance for the year but saw materially widening spread levels over the course of Q3, leading to increased exposure to some of these opportunities after earlier profit taking. We continue to expect potentially outsized return potential across these strategies over the near and medium term. Our ECM strategy saw robust activity across Asia in the third quarter, with deal flow further accelerating from the first half of the year in terms of deal count and issuance size.

Going forward we see the pace of Hong Kong IPOs adjusting amid tightening scrutiny of AI-related paper, although we remain constructive on selective opportunities and anticipate a robust follow-on and secondary pipeline in several high-quality names. We maintain high conviction in our core ECM positions and are closely tracking fundamentals alongside potential market catalysts heading into Q4.
 

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