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Alternative Data for Event-Driven Investing: How Hedge Funds Use Behavioral Signals to Detect Catalysts Before the Market (2026)

How event-driven hedge funds use alternative data to detect M&A activity, activist campaigns, spin-offs, and restructuring catalysts before they become public. Search signals, news volume, social data, and multi-source monitoring for merger arbitrage, special situations, and distressed investing in 2026.

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alternative data event-driven investing event-driven hedge fund alternative data merger arbitrage alternative data special situations alternative data signals M&A alternative data hedge funds activist investing alternative data distressed investing alternative data event-driven catalyst detection

Event-driven investing is built on a simple premise: corporate events create mispricings, and the investors who identify those events earliest capture the most alpha. In 2026, alternative data has become the primary tool for compressing the time between when an event becomes detectable and when the market prices it in.

The HFRI Event-Driven (Total) Index returned 8.7% in 2024, and the strategy has attracted increased institutional allocation as global M&A deal value rose approximately 40% in 2025 to $4.8 trillion (the second-highest total on record), according to Bain & Company's 2025 M&A revi

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