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

LONDON, UK – November 24, 2025 – In the high-stakes world of mergers and acquisitions, the movements of major institutional investors are scrutinized for every subtle clue. A recent regulatory filing has pulled back the curtain on one such move, revealing that multi-strategy investment giant Balyasny Asset Management has built a significant position related to Unite Group plc, a key player in a major takeover within the UK's booming student accommodation sector.

The disclosure, a Form 8.3 filing under the UK's Takeover Code, details Balyasny's economic interest in Unite Group, the company currently in the process of acquiring rival Empiric Student Property plc. While not a direct equity holding, the position, managed through cash-settled derivatives, offers a fascinating glimpse into the sophisticated strategies hedge funds employ to capitalize on corporate consolidation and underscores the powerful tailwinds driving investment in student housing.

The Regulatory Chessboard

At the heart of this revelation is the UK Takeover Code's Rule 8.3. This rule is a critical mechanism for market transparency, designed to ensure a level playing field during an "offer period"—the timeframe of a takeover bid. It mandates that any party holding an interest of 1% or more in the target or offeror company must publicly disclose their position and any subsequent dealings.

What makes Balyasny's filing particularly noteworthy is the nature of its holding. As of November 21, 2025, the firm held an interest equivalent to 4,800,493 shares, representing 0.97% of Unite Group's ordinary shares. Crucially, this entire position is held through Contracts for Difference (CFDs), a type of derivative that allows an investor to speculate on the future price movement of an asset without owning the asset itself.

The Takeover Panel updated its rules years ago to ensure such derivative holdings are included when calculating the 1% disclosure threshold, closing a loophole that once allowed firms to build substantial economic exposure covertly. Balyasny’s position, hovering just under the 1% mark, is a masterclass in strategic positioning. It grants the firm significant financial interest in the deal's outcome while navigating the complex disclosure landscape. The filing also shows active trading, with Balyasny both increasing and decreasing its long position through multiple CFD transactions on the same day, highlighting the dynamic nature of its strategy.

A Sector in Motion: The Unite-Empiric Merger

Balyasny’s trading activity is not happening in a vacuum. It is set against the backdrop of one of the most significant deals in the UK's Purpose-Built Student Accommodation (PBSA) market: Unite Group’s proposed £723 million acquisition of Empiric Student Property.

The merger, first announced in August 2025, received the green light from Empiric's shareholders in early October. However, the most critical hurdle was navigating the UK's Competition & Markets Authority (CMA). The prospect of the UK's largest student accommodation provider absorbing a notable competitor triggered an in-depth review. The market held its breath until just this past week, when the CMA announced it had cleared the takeover following its initial phase one investigation.

With this major regulatory obstacle removed, the deal is now anticipated to complete in the first half of 2026. This clearance is the likely catalyst for increased activity from arbitrage-focused investors like Balyasny. The fund's disclosure, coming hot on the heels of the CMA's decision, suggests a calculated bet that the remaining conditions for the merger's completion will be met, leading to a profitable outcome.

Betting on Beds: The Allure of Student Accommodation

The Unite-Empiric deal and Balyasny's corresponding interest shine a spotlight on the immense appeal of the UK student accommodation sector. Valued at over £8.5 billion in 2025, the market is projected to grow at a steady clip of nearly 5.5% annually through 2033. This isn't a fleeting trend; it's a market underpinned by powerful and persistent fundamentals.

Investor demand is fueled by a chronic supply-demand imbalance. While UK universities continue to attract record numbers of both domestic and international students, the construction of new student housing has not kept pace. Projections indicate a potential nationwide shortfall of approximately 620,000 student beds by 2026. This scarcity makes existing, high-quality portfolios like those owned by Unite and Empiric incredibly valuable.

For institutional investors, the sector offers a compelling proposition: stable, inflation-linked rental income and high occupancy rates, making it a "recession-proof" asset class. Even with recent headwinds, such as a slight dip in enrollment from Chinese students and rising construction costs, the overall sentiment remains overwhelmingly positive. Over £1.8 billion poured into the sector in the third quarter of 2025 alone, demonstrating deep-seated confidence in its long-term prospects.

Balyasny's Strategy: Arbitrage or Long-Term Conviction?

So, what is Balyasny's ultimate game? The firm is known for its multi-strategy approach, which includes a dedicated "Event and Arbitrage" desk that specializes in capitalizing on corporate events like mergers. The active trading in Unite CFDs, buying and selling within a narrow price range, strongly suggests a merger arbitrage play. In this strategy, a fund buys shares (or gains exposure via derivatives) in the target company and sometimes shorts the acquirer, aiming to profit from the price convergence as the deal nears completion.

Analysts remain broadly bullish on Unite Group, with an average 12-month price target suggesting a potential upside of over 60% from its October levels. This optimism is fueled by Unite's strong rental growth and strategic expansion, now bolstered by the impending Empiric acquisition. By using CFDs, Balyasny can leverage its capital to bet on this upside without the complexities of direct share ownership.

Whether this is purely a short-term arbitrage play or the beginning of a larger, long-term conviction in the UK student housing market, Balyasny's filing is a clear vote of confidence. It signals that sophisticated, data-driven capital sees significant value in the Unite-Empiric consolidation and, by extension, in the enduring strength of the UK's market for student housing. The firm's calculated maneuvers provide a powerful indicator that the smart money is betting firmly on the deal's success and the sector's continued growth.