Closed-end Funds a Hot Ticket

After taking a beating last year, closed-end funds are offering the biggest discount since 2009, luring hedge fund investments.

Hedge-fund firms Saba Capital Management LP and Pine River Capital Management are piling into closed-end debt funds with share prices that plunged below the value of their assets by the most since the credit crisis.

Saba, the $3.9 billion manager run by Boaz Weinstein, has amassed at least $847.3 million in the publicly traded funds after it started buying them last year, moving into an area traditionally dominated by individual investors, regulatory filings show. Pine River purchased $159.6 million of shares that on average fell as much as 9.1 percent below their holdings in December, the biggest gap since 2009 as measured by Thomas J. Herzfeld Advisors Inc.

The magnitude of Saba’s recent purchases of the fund shares is unprecedented, according to Warren Antler, who specializes in analyzing closed-end funds at AST Fund Solutions LLC in Lyndhurst, New Jersey.

“You’ve got a big hedge fund buying into this space,” he said in a telephone interview. “This showed up in the last quarter.”

Page 1 of 2

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Advertisement. Closing in 15 seconds.