Hedge fund managers that specialize in distressed securities or merger arbitrage also fall under this classification. The Event Driven program also consists of hedge fund managers who follow multiple event strategies. These strategies may involve restructurings or recapitalizations, spin-offs or carve-outs, and directional positions that may not be fully arbitraged. Thus, the returns to this group of hedge fund managers may be based on fundamental research as well as directional market returns, while merger arbitrage managers are expected to hedge the exposure to market direction.