Water Island Capital of New York has filed a registration statement with the SEC to offer the Arbitrage Funds. The funds will invest at least 65 percent of their assets in companies involved in mergers or acquisitions.

The investment adviser will largely purchase shares of companies expected to be takeover targets, and so, rise in value, according to the May 24 filing. However, the fund will also look for companies on both sides of mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations or corporate reorganizations, according to the filing.

The fund may also employ hedging techniques, such as short selling or using put and call options.

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