Saba Capital Management, which was founded by Boaz Weinstein, had its worst year yet in 2014. The hedge fund had an 11 percent loss, making it its third successive yearly decline.
In December, Saba’s main fund declined 1.2 percent, which was the credit firms 10th lost in 2014, according to a reliable unidentified source.
Saba Capital Management did not make money the last three months in 2014, which resulted in a percentage loss in both October and November. The hedge fund was down 2.8 percent in October and 3.1 percent in November. Simultaneously there was a decline in oil prices, which widened credit spreads.
Weinstein is a hedge fund manager who is the former co-head of Deutsche Bank AG’s credit business. Since 2012, central banks have been deflating interest rates and stifling instability, which makes it hard to utilize the price differences among securities.
“The environment for Boaz’s strategy has been challenging, but if things get more volatile — and we think they will — he will make a significant amount of money,” said Gregg Hymowitz, managing partner at Entrust Capital Management.
Entrust Capital Management has around $300 million dollars invested in Saba Capital Management. Entrust is taking into account the potential expansion of Saba’s credit spread, which might lead to Entrust investing more in Saba.
In April 2009, Weinstein founded Saba Capital Management. In the beginning the hedge fund had good returns. In 2010, Saba gained 11 percent and 9.3 percent in 2011, which was a period when most hedge funds were losing money. In 2012, Saba began to lose money. The hedge fund lost 3.9 percent in 2012 and 6.8 percent in 2013.
As of January first, the assets at Saba equaled $1.95 billion dollars, compared to two years ago when the assets equaled $5.5 billion dollars.
According to Bloomberg, credit funds increased 7.3 percent last year. Claren Road Asset Management, which is owned by Carlyle Group LP, declined 10 percent in every month but December in 2014.