Balyasny's Bet: Decoding the Play in UK Student Housing

LONDON, UK – November 27, 2025

A regulatory filing has pulled back the curtain on a significant financial maneuver by Balyasny Asset Management, revealing the global hedge fund’s calculated position in the UK’s fiercely competitive student accommodation market. A Form 8.3 disclosure, made public today, shows Balyasny holding a 1.25% interest in Empiric Student Property plc, a move that coincides with the final stages of Empiric's acquisition by its larger rival, Unite Group plc. The timing and nature of this investment offer a masterclass in modern hedge fund strategy, blending regulatory transparency with sophisticated derivative plays.

The Regulatory Spotlight

The disclosure comes via a Form 8.3, a document mandated by the UK's Takeover Code. This filing is not a routine portfolio update; it is a specific requirement triggered when an entity holds an interest of 1% or more in a company that is the subject of a takeover offer. Its purpose is to ensure market transparency and prevent unfair advantages during the sensitive period of a merger or acquisition. In this case, with Unite Group’s £723 million acquisition of Empiric moving towards its expected completion in January 2026, the market is under close scrutiny.

Interestingly, Balyasny's stake, totaling 8,334,676 shares, is held almost entirely through cash-settled derivatives, specifically Contracts for Difference (CFDs). These financial instruments allow an investor to gain economic exposure to an asset's price movements without owning the underlying shares. This distinction is crucial. While Balyasny does not hold voting rights associated with direct share ownership, its financial interests are squarely aligned with Empiric’s stock performance. The Takeover Code's modern rules rightly recognize such derivative positions as significant interests, ensuring that major economic players cannot operate in the shadows during a bid period.

The filing also noted that Balyasny is making disclosures in respect of Unite Group, the acquirer. This signals that the hedge fund is actively monitoring or has positions across both sides of the deal, a common tactic in merger arbitrage strategies where investors seek to profit from the price differential between a target company’s stock price and the valuation offered by the acquirer.

A Bet on a Resilient Sector

Balyasny's move is more than just a clever trade; it is a significant bet on the fundamental strength of the UK's Purpose-Built Student Accommodation (PBSA) market. This sector has proven to be remarkably resilient and lucrative, drawing billions in global investment capital. The market dynamics are compelling: a structural undersupply of housing coupled with ever-increasing demand from both domestic and international students.

Across the UK, the student-to-bed ratio in key university cities hovers around 2.7 to 1, creating intense competition for quality accommodation. This imbalance fuels strong rental growth, with average rents climbing 7.5% annually since 2021 and forecasts predicting continued growth of 4-6% per year. Investors are taking notice. The third quarter of 2025 alone saw a record £1.83 billion transacted in the UK PBSA market, confirming its status as a top-performing real estate asset class.

Empiric Student Property has carved out a premium niche within this market, operating high-end, studio-led accommodation under its "Hello Student" brand. While the company noted a slight moderation in occupancy for the upcoming academic year, its underlying performance, including a 4.5% like-for-like rental growth, remains robust. The acquisition by Unite Group, the UK's largest student accommodation provider, is set to create a dominant market force, consolidating a portfolio valued in the billions. Balyasny’s investment is an endorsement of the value locked within Empiric and the strategic rationale of the merger itself.

The Art of the Derivative Play

The finer details of the disclosure reveal the tactical precision of Balyasny's trading. The filing shows that on November 26, the firm was actively "reducing a long position" in Empiric through several CFD transactions at prices between £0.75 and £0.76 per unit. This activity occurred just before the UK's Competition & Markets Authority (CMA) announced its unconditional clearance of the Unite-Empiric merger on November 27.

Reducing a long position means selling off a portion of a bullish bet. In this context, it strongly suggests a classic profit-taking maneuver. With the CMA's approval removing the final major regulatory hurdle, the deal's certainty increased, likely causing Empiric's share price to converge closer to the acquisition value. For a hedge fund holding a derivative position, this is the ideal moment to crystallize gains.

However, Balyasny did not close its entire position. By retaining a significant 1.25% stake, the firm keeps skin in the game, potentially anticipating final dividend payments or other closing mechanisms that could offer further upside. This partial exit is a hallmark of sophisticated risk management—locking in profits while maintaining exposure to the deal's final chapter. It's a carefully calibrated move that balances immediate returns with continued strategic positioning.

A Global Player's Calculated Move

Balyasny Asset Management is a formidable force in the investment world. With approximately $29 billion in assets, the Chicago-based firm operates a global multi-strategy platform, deploying capital across everything from long/short equities to macro and systematic trading. While not known as a specialist in real estate, its broad mandate allows its portfolio managers to identify and act on event-driven opportunities like the Empiric-Unite merger.

This investment fits perfectly within a multi-strategy framework. It is part event-driven arbitrage, part thematic bet on a strong sector, and executed with the kind of derivative-led precision that defines modern hedge funds. After a period of recalibration in early 2025, the firm has reportedly been doubling down on its macro-driven strategies, and this UK-based play demonstrates that focus in action.

As the Unite-Empiric merger proceeds towards its January 2026 completion, the deal is reshaping the landscape of UK student housing. The creation of an even larger market leader will have long-term implications for students, universities, and investors. For now, the public disclosures offer a rare glimpse into how astute financial players like Balyasny navigate these transformative moments, capitalizing on market mechanics and regulatory milestones with speed and precision.