Partner and Head of Research at Davidson Kemper, Suzanne Gibbons, on building a global research function, embedding AI, and capitalising on the rise of complex mega deals.

By pure numbers, Davidson Kempner has a global remit. The investment management firm boasts over $40bn and invests across many asset classes. This diverse remit requires a deep research function, which is led by Suzanne Gibbons. Gibbons has been at the firm for over two decades and now oversees the global research team, which supports every investment team from idea generation to trading implementation. This centralised research function, Gibbons believes, is “unique, and a big differentiator.”

A central tenet of Gibbons' role has been to integrate AI into the research function, in a way that isn't solely a prerequisite but as a key, value-add feature. “A recent development in this area is the launch of an AI lab, which is led by a member of the quant research team and a leader of our front-office tech team. They work with all the investment groups on different projects we can build around AI into our processes.”

Gibbons’ background at the firm had been in opportunistic credit investing, and her transition into the Head of Global Research was a proactive move from the firm. The three questions that her team is constantly asking are: What are we excited about? What are those opportunities that have duration? What do we think is misunderstood? If something checks all those boxes, “it's definitely an area that we lean into and start to investigate”, notes Gibbons.

The firm has a long backlog of different themes or ideas they are currently exploring. Those ideas are a mixture of idiosyncratic or single-name opportunities; one of the first pieces of research that Gibbons published was called Tides of Credit: Opportunity and Dispersion, which explored concerns around the degradation in credit documents in the market due to the rise of the direct-lending asset class. The firm also flagged in that paper their concerns around software names and the high levels of concentration, a notion that has certainly played out in examining the market today.

Gibbons is also keen to point out the absolute return paper the firm published in January 2025, which flagged an expected revival of M&A activity. This has certainly played out, she notes, “we have an uptick in mega deals, and as the global regulatory complex has increased, it is a more protracted timeline and greater potential risk - leading to more opportunity.” Moreover, for a merger arbitrage investor like Davidson Kempner, the complexity premium has greatly improved: “if you compare more complex deals to simpler deals at the same point in time, it's around 60% higher compared to five years ago when it was only around 25% higher.”

The global rise of mega deals is a great opportunity for the firm; deals above $10bn get the most scrutiny. These types of deals are the most liquid, Gibbons notes, meaning “that you can move in and out of them as your view changes”, a strategy which is complemented by Davidson Kempner’s vast capital resources, allowing them to be flexible across their portfolio.

Watch the full interview here.